The Week in Switzerland

Dear Swiss Abroad,

As in several other European countries, household budgets are feeling the strain in Switzerland. Money will be the main theme in our selection of news from Switzerland over the past week.

But in true Swiss fashion, when times are tough, there’s a creative approach: finding a little gold in the garden. And it’s not a joke, as you’ll discover in our “Swiss oddities” section.

Enjoy the read!

The big stories of the week

Keystone-SDA

A major survey conducted by the Swiss Broadcasting Corporation (SBC) reveals that financial concerns are becoming more significant for Swiss households, with a third of respondents describing their situation as “difficult”.

The “How are you, Switzerland?” survey shows that financial worries are weighing more heavily on people than they were a year ago, when the first version of this opinion poll was conducted. A third (35%) of respondents report that their situation is either very or fairly burdensome, up by four percentage points from last year. Nearly half are “somewhat” concerned about their household budget, while only 18% are not at all worried.

Notably, the situation is particularly severe in the Italian-speaking region, where 59% of those surveyed described their financial situation as “very or rather very difficult” Across the country, prices are rising faster than wages, leading to reduced purchasing power.

The survey also indicates that 44.38% of Swiss believe the gap between rich and poor is too wide and (41.73%) think wealth should be taxed more heavily. This sentiment could have political consequences. “The worsening economic situation for the population may partly explain the recent setbacks experienced by the centre-right majority in parliament, particularly regarding the referendum on the 13th old-age and survivors’ pension payment,” notes the SBC analysis.

• Full poll results on Swiss public television, SRFExternal link (in German)
• Further coverage on Swiss public radio, RTSExternal link (in French)

Keystone / Michael Buholzer

Migros reverts to lower prices amid competition from discounters

This week, Migros announced a major shift in strategy, aiming to respond to competition from discounters with cheaper products and new stores.

The Swiss retail giant is revisiting its roots; in 1925, founder Gottlieb Duttweiler disrupted a heavily cartelised Swiss market by significantly cutting prices. Now, almost a century later, Migros is implementing a similar strategy, with a plan to invest CHF2.5 billion ($2.88 billion) by 2030 to modernise 350 supermarkets, open 140 new stores and reduce the prices of 1,000 products.

This strategic shift follows an ongoing reorganisation for Migros, which has been refocusing on its core business since 2019. Earlier this year, Migros announced plans to sell its specialist brands, such as Micasa (furniture), Melectronics (electronics), SportX (sporting goods) and Hotelplan (travel).

While some critics consider the new approach risky, suggesting it may harm Migros’ brand and cannibalise its own discounter, Denner, the news is a boon for Swiss consumers. Following Migros’ announcement, discounters Aldi and Denner immediately responded with their own low-price initiatives, signalling a potential price war.

• Coverage of Migros’ new strategy in BlickExternal link (in German)
• More insights, including video and audio elements, on Swiss public radio, RTSExternal link (in French)

Keystone / Peter Klaunzer

Swiss Post cuts services further

Swiss Post continues to streamline its operations. In a press conference on its “post office of tomorrow” strategy held on Tuesday, management announced the closure of 170 additional post offices. The closures had been anticipated since the spring.

The reason behind this latest wave of closures remains unchanged: “a drastic reduction in over-the-counter transactions,” according to Swiss Post. Payments have fallen by 68% since 2010, and mail volumes have also decreased. Management expects this trend to continue in the coming years, necessitating further action.

Efforts are underway to find solutions for the affected branches. Customer service may be maintained through partner outlets, such as shops, or at customers’ homes during postal rounds. Since July, Swiss Post has been in contact with affected cantons and municipalities to find solutions. Swiss Post aims to retain 2,000 locations across Switzerland, including 600 directly operated branches (down from 770) and 1,400 partner-operated subsidiaries.

Unsurprisingly, this announcement has sparked considerable backlash, particularly in the regions affected. The Syndicom union is urging Swiss Post to maintain its current network and is calling on political stakeholders to actively oppose the planned reductions.

• Update on Swiss Post’s restructuring on Swiss public radio, RTSExternal link (in French)

dpa / Felix Kästle

Swiss government reduces tax-free allowance for cross-border shopping

Following its weekly meeting on October 16, the Swiss government announced a reduction in the tax-free allowance for cross-border purchases, effective January 1, 2025. This development has been widely covered in the Swiss media.

Currently, value-added tax (VAT) is only applied to purchases abroad up to a total value of CHF300 ($345) per person per day. The government’s decision will reduce this threshold to CHF150. The aim is to mitigate the effects of “shopping tourism” on Swiss businesses, particularly in cantons near the border.

Cross-border shopping remains popular in border regions, where goods are generally cheaper in neighbouring countries. Many consumers interviewed by the media said they would simply increase the frequency of their shopping trips to avoid exceeding the new CHF150 limit.

Retailers across the border do not seem particularly concerned. “It won’t change anything for us; it’s really the Swiss consumer who will notice the difference. They’ll come more often. Instead of coming once, they’ll come twice a week,” an Alsatian supermarket manager told France Bleu and France 3.

• ReportExternal link from France Bleu and France 3 (in French)

Keystone / Anthony Anex

Swiss National Bank to introduce new banknote series with ‘Switzerland and its altitudes’ theme

New Swiss banknotes are on their way. On Wednesday the Swiss National Bank (SNB) launched a design competition open to Swiss-based graphic designers.

The theme of the new series will be “Switzerland and its altitudes”. According to the SNB press release, the design will “depict our country from its deepest valleys to its highest peaks, showcasing the diversity of life across various altitudes”. After the submission phase, 12 graphic designers will be selected to participate in the competition, which begins in February 2025, with designs slated for publication in the autumn.

This will be the tenth banknote series in Swiss monetary history. Despite the rise in digital payments, the SNB remains confident that cash will continue to play an important role as both a payment method and a store of value. Currently, about a third of all transactions in Switzerland are still made in cash.

• Further details on Swiss public radio, RTSExternal link (in French)

Swiss oddities

Switzerland is often associated with banks and insurance companies. It’s no surprise, then, that many Swiss keep a small reserve of gold, whether in coins or bars, as a precaution against hard times. According to one survey, Swiss households hold an estimated 200 tonnes of gold, valued at CHF14.9 billion ($17.16 billion).

What’s far less conventional, however, is where this gold is kept. While one might assume it’s stashed away in the super-secure vaults of banks, many Swiss prefer to keep it much closer at hand – even underfoot.

Picture of the week

Keystone / Anthony Anex

Autumn has arrived in Switzerland

Every day this week, large areas of Switzerland have been blanketed in fog, as captured in this photo of the Federal Palace in Bern on Wednesday. Depending on one’s taste, this scene could be viewed as either romantic or foreboding.

The week ahead

The upcoming week’s agenda appears relatively light on domestic events. Attention will be focused on international news, with the result of the US presidential election anticipated to draw significant interest and commentary in Switzerland as well.

Translated from French with DeepL/amva/ts