Delhaize deems controversial franchise plan a success

Delhaize is calling the first results of the implementation of its franchise plan "encouraging", saying all 128 Belgian supermarkets have now found a private buyer.

The buyers include eight people who already own one or more other Delhaize stores, five who are current Delhaize employees and several external candidates.

Each will undergo a training programme in the coming weeks and all transfers are projected by the company to be completed by the end of this year.

The grocery chain was met with criticism and social backlash when it first announced its intent to move all its Belgian shops to a privately-owned franchise model, with workers concerned about losing social protection and seeing working conditions further deteriorate.

Protests, strikes and blockades of depots followed over the months but Delhaize refused to abandon its plan.

“We are starting to see encouraging results, with an acceleration in same-store sales and a stabilisation of market share in converted shops,” said Frans Muller, chief executive of parent company Ahold Delhaize.

But trade unions remain critical. ACLVB union’s Wilson Wellens said some franchisers are abusing loopholes in the law that will result in staff working for less pay.

“I see in Delhaize's list that they have again sold three shops to the same acquirer,” Wellens said. “The latter is going to divide the shops among different companies which means the staff will not be in the same joint committee [for collective wage bargaining].”

Chains with several stores are covered by a different joint committee than the smaller independent ones. According to Wellens, in the latter case, rules apply that are financially less incentivising for staff, for example for evening or Sunday work.

“People are going to feel that,” Wellens said.

Delhaize spokesman Roel Dekelver said there were no violations, adding: “Everything is 100% in accordance with the law.”

Wellens also hopes that there will soon be clarity for staff at Delhaize's headquarters, where jobs are also disappearing as a result of the franchising.

“We are doing everything we can to limit the number of forced departures,” Dekelver said, though Delhaize added that it was unable to provide any specific figures.

Management made the first changes official last September. Since then, an estimated 45 supermarkets have already officially reopened with the new buyers at the helm.

Parent company Ahold Delhaize Group reported that it achieved sales of €23.02 billion in the fourth quarter of 2023 – an increase of 1.9% at constant exchange rates compared to the previous year.

Sales rose by 7.5% to €9.2 billion in Europe, but fell by 1.5% to €13.8 billion in the United States.

The group is proposing to pay a dividend of €1.10 per share, 4.8% more than the previous year.