Uncertain future for employees of Delhaize Belgium

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The Belgian supermarket chain has announced plans to close 14 stores deemed “unprofitable” and to lay off 2500 employees.

Workers are shocked by the decision, given that the company is still well in profit.

On Wednesday 18 June, dozens of employees were still gathered in front of Delhaize’s head office in Brussels to protest against the restructuring plan imposed by the board of directors. The week before, a wildcat strike left nearly 40 supermarkets closed.

The disgruntled workers carry placards that read "We are all Delhaizians on sale" as loudspeakers play the old pop song "The Lion Sleeps Tonight", in reference to the brand’s emblem.

Anne, who has worked at the company for 15 years, is "very unhappy with the situation. Two thousand five hundred of my colleagues are going to find themselves out of a job. Sometimes they are couples working for the firm."

The pill is even harder for the workers to swallow given that the company made 179 million euros in profits last year (US$244 million).

"Profitability for the stores run by independent operators fell by 70 per cent between 2010 and 2014," argues the spokesperson for Delhaize, Roel Dekelver.

Myriam Delmée, head of the retail section of the white-collar union SETCa (Syndicat des employés, techniciens et cadres de Belgique), insisted in an interview with Equal Times that "the plan is unnecessary. Between the contracts that expire and are not renewed and the retirees that are not replaced, 500 hundred jobs are already done away with every year."

 

Deteriorating working conditions

The vice president of the SETCa also fears that working conditions will be drastically driven down. "To offset these job cuts, the workers will be called on to be more productive, more polyvalent and more flexible with their working hours."

Philippe, who has been working for Delhaize for 28 years, has seen these changes taking place at his store in Arlon over the last few years. "Our superiors want us to imitate the hard discounters where the conditions are very harsh. The work is getting harder and harder. The level of sick leave is increasing every year."

In a bid to justify the measures, Delhaize’s management argues that "the market is very competitive in Belgium, where there are six foreign players in addition to the two Belgian ones, which are Delhaize and Colruyt."

As Christophe Vignon, a specialist in major retail distribution and professor at the Kedge Business School, explains, "It’s a sector with very low margins. Labour is the only adjustment variable. With low-skilled employees, the social impact is drastic, as they have great difficulty finding another job. To reassure their shareholders, the big retailers make the mistake of basing their decisions on short-term objectives" like Delhaize has done by announcing this plan following a fall in first-quarter profitability in 2014.

 

More layoffs ahead?

To avoid job losses, the trade unions representing workers in the sector are calling for a new business strategy.

According to Philippe Nobile, director of Javelin Group France, a consultancy firm advising several supermarket chains in Europe, "The brand is seriously behind in terms of e-commerce. The traditional supermarkets also need to make an effort when it comes to customer care, which is very often inadequate."

Christophe Vignon confirms this analysis. "These companies talk about the quality of the work but, in reality, only the quantity of work is judged. That creates huge tensions. They’re aware of it but, at the end of the day, they cut jobs. It’s a real contradiction."

Delhaize has also announced plans to invest 450 million euros (US$613 million) in staff training and e-commerce development.

But for Delphine Latawiec, national retail secretary for the employees’ trade union Centrale national des employés (CNE), "These announcements are far too vague. Moreover, the automation of work processes and e-commerce could have an even bigger impact on employment."

As the sector undergoes radical transformation, the social partners fear the worst for the years to come.

Already in 2010, Carrefour Belgium announced plans to cut 1500 jobs, which led to massive strike action.

Just one day after Delhaize announced its restructuring plan, it was the Cora supermarket group’s turn to ask its employees for more flexibility, to reduce its labour costs. The management is also looking to cut its workforce by not replacing employees who retire.

This story has been translated from French.