The Delhaize supermarket chain has announced that it will transform all of its Belgian stores that it currently directly manages into franchises. The move directly contradicts previous assurances to employees and has been widely condemned by Belgian unions.
In a press release published on Tuesday morning, Delhaize claimed that it was compelled to make the decision in response to the increased market share of its 636 already-franchised stores in Belgium. Whilst these stores have performed strongly, the remaining 128 directly-managed stores saw their profitability and market share fall, "despite many initiatives and investments".
Delhaize denied that the change would lead to job losses at the newly franchised stores: "All employees of the supermarkets involved will keep their jobs and make the transition. They will also maintain their current wages and working conditions." However, it admitted that the decision would lead to a "gradual reduction in the number of positions" at the company's headquarters.
"In order to further invest in the future of Delhaize, we need to adapt our model," said Delhaize CEO Xavier Piesvaux. "I fully understand that this announcement can spark strong emotions but I am convinced that this growth plan is the only option to guarantee a sustainable future for our company, our stores, our partners and our employees."
'Much worse than expected'
The decision was immediately denounced by Belgian unions, some of which have recently taken to organising strikes over poor working conditions at the supermarket chain.
"This news is shocking," said the Secretary of the General Confederation of Liberal Trade Unions of Belgium (ACLVB-CGSLB), Wilson Wellens. "128 stores are to be franchised. This is much worse than expected."
Wellens' words were echoed by the Secretary of the Association of Employees, Technicians and Managers (BBTK-SETCa), Jan de Weghe. "This is a bomb," he said. "An attack on staff."
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According to the ACLVB-CGSLB, up to 8,000 employees will be impacted by Delhaize's decision. The BBTK-SETCa, meanwhile, suggested that the number affected could be 1,000 higher.
Delhaize's decision is all the more surprising given that the company had explicitly denied as late as Monday that it was planning to franchise its stores. "There is no franchise plan for the stores under our own management. Delhaize is focused on increasing its commercial momentum, reducing costs with more efficiency," l'Echo reported a company spokesperson as claiming.