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Staff strike after Delhaize announces plans to turn all stores into franchises
More than 100 Delhaize shops have gone on strike following an announcement that the grocery store chain intends to switch to a franchise model.
There are 128 shops in Belgium that stand to be affected by the change, making the spontaneous strikes at more than 100 of them - including in major cities such as Brussels, Antwerp and Ghent - unprecedented.
Delhaize’s shops employ about 9,000 people and the supermarket group also has 636 affiliated independent shops such as AD Delhaize, Proxy Delhaize and Shop & Go.
“In Brussels, almost all shops are on strike,” said ACLVB union secretary Wilson Wellens. There are 22 branches in Brussels, and the strike means that customers are unable to shop there.
Wellens called the decision to switch to a franchise model “shocking”, saying that the news hit employees hard: “Some 128 shops are being divested to franchises. This is much worse than expected.”
Delhaize’s employees will be transferred to independent contractors, with promises that wage and working conditions will not change – at least at the start.
Multiple unions expressed support for the widespread strikes, including ACV Puls.
“This is a bombshell,” added BBTK union secretary Jan De Weghe. “An attack towards the staff. A disgrace.”
Apart from the shop workers being affected by the move, layoffs will occur at the head office, Delhaize’s management has said.
“At the head office, the gradual transition from own supermarkets to affiliated shops will result in the gradual reduction of the number of positions,” the company said in a statement. “The number of departures will be kept to a minimum.”
Delhaize has more than 750 shops in Belgium, 636 of which are already operated by independent owners (the AD, Proxy and Shop & Go stores).
Those shops saw their market share rise steadily in recent years, Delhaize said, which is its main reason for switching the others over to the franchise model.
Delhaize said that the franchise model allowed those stores to develop “strong local roots and flexibility in their operations” while the company-owned shops saw their profitability and market share decline over the same period, “despite many initiatives and investments”.
“To further invest in the future of Delhaize, we need to adapt our model,” Delhaize chief executive Xavier Piesvaux summarised.
“I fully understand that this announcement may cause emotions, but I am convinced that this growth plan is the only option to ensure a sustainable future for our company, our shops, our partners and our associates.”
Some are speculating that the move marks a greater change in the supermarket sector. Only a few weeks ago, the Carrefour Market supermarkets owned by Mestdagh adopted the Intermarché brand under a franchise model.
But the supermarket sector was one of the only sectors that held up during the pandemic, which makes it appear odd for major actors to change their models despite overall consistent growth.
But Pierre-Alexandre Billiet, CEO of retail consultancy Gondola, told RTBF that the sector was struggling even before the pandemic, and the health crisis only masked deeper issues such as expensive employment and increases in prices for energy and raw materials.