Zug, 16.05.2022

Migros terminates contract of Sandi restaurant operator

After its opening hours were reduced in March, the restaurant ceased operations completely at the end of April. It's turnover is 70% lower after the Corona pandemic.

Just over a year after the re-opening of the Sandi restaurant following the extensive renovation of the Herti shopping centre, the tenant announced reduced opening hours in January 2022, due to the sluggish course of business.

Mustafa Uslu of Uslu Gastro GmbH Ebikon, which has been operating the restaurant since 2005, wrote in his message to the guests: "The work has decreased massively, and we have brought in too little earnings to be able to cover further additional personnel costs and operating costs."

To make matters worse, members of the staff have became ill with the corona virus and couldn’t come to work. The regime of reduced opening hours in the morning and evening hours was supposed to be limited until March. But the "Sandi" suddenly closed its doors completely at the end of April.

Former lunch guests staying in home office
Rahel Kissel, Head of Corporate Communications at the Migros Lucerne Cooperative, comments on the reasons as follows: "The challenges of the pandemic and the associated restrictions in the retail trade and gastronomy have impacted our tenants in the Herti centre and ourselves as landlords."

The changed shopping behaviour and the absence of guests due to home office have particularly affected the Sandi restaurant. "We maintained close contact with the tenant during this time, and granted him temporary goodwill, for example in the form of reduced opening hours and rent reductions and waivers."

The tables of the Sandi restaurant in Zug's Herti shopping centre are currently empty, and the restaurant has ceased operations                                                                     Photo: Matthias Jurt, Zug
The operator of the “Sandi” informed its guests with this message,                   Photo: Marco Morosoli, Zug

Unfortunately, however, the Sandi restaurant has not yet succeeded in serving enough customers to be able to operate profitably and with a prospect of improved success

"As a result, Migros Luzern has terminated the lease. We regret that very much and it was a difficult decision."

Corona and high investment costs destroyed the business
"It’s true that Migros granted us a waiver of 50% of the net rent during the second lockdown," says the former operator of the "Sandi" Mustafa Uslu. However, he and his team had to pay the full rent of CHF 14,000 net per month during the first lockdown. "At the same time, we hadn't sold a single cup of coffee for months."

At the same time, the conversion of the Herti shopping centre took place, as a result of which only one month's rent was waived for all the traders there. "We invested a total of around CHF 400,000 in a new facility as part of the renovation, ," says Uslu. In doing so, he reached his financial limit.

Sales slumped by 70%
"After the restructuring, Migros increased the rent to CHF 18,500 net, but as I said, granted us a reduction of 50% during the second lockdown." Due to the certificate requirement, sales collapsed by about 70% compared to before Corona, so that he could no longer work economically. As a result, he fell behind with the rent.

He therefore again sought the conversation with his landlord. "We have been reliable tenants for over 15 years. But Migros no longer wanted to make concessions, and terminated the contract in March without any discussion or announcement." They simply sent the debt enforcement officers (Betreibungsbeamten) to the restaurant.

"I don't understand why they did that, because if Migros had waived half of the rent for a few months, we would have been able to maintain operations," he is convinced. Because his restaurant would certainly have recovered by next autumn, and guests would be returning again. "Now we have both lost out, Migros and us. And the restaurant is now empty and my employees no longer have a job."

Mustafa Uslu and his family run another restaurant in the Ladengasse shopping centre in Ebikon. "Fortunately, the administration is much more accommodating there."

Migros is looking for a new tenant
"We try to support our tenants, and look for solutions together, especially for long-term tenants such as the operator of the Sandi restaurant," writes Rahel Kissel, media spokeswoman for the Migros Lucerne cooperative. "For example, we also invested in the conversion of the restaurant premises during the conversion of the centre."

However, Migros continues to believe in the possibilities of a catering location with outdoor seating in a lively and developing district. "That's why we would like to continue to rent the restaurant to a catering provider in the future."

This contributes to an attractive and broad tenant mix in the centre. "The locations are advertised for rent, and we are actively approaching potential tenants," says Kissel. But there will be a temporarily empty building, however.