So it seem Pick n pay gonna lay off people, my guess would be same strategy Game / Makro / Deon etc had before a foreign company can acquire them. Its part of the deal. Is this a strategy pick n pay has as well for foreign investment, especially when they opening extra branches in Cape Town. Does not make sense, opening more stores and laying off workers, Over 3000 families will not have food on table, must be for gain or profit.
What the unions have to say…..
Pick n Pay, which employs 36673 people, said the decision was made in the face of major problems such as declining profitability and the loss of market share.
Operations director Neal Quirk said the company had notified the SA Commercial, Catering and Allied Workers Union in accordance with the Labour Relations Act.
“We have requested confirmation of meeting dates in order for us to consult Saccawu,” he said.
Trade union federation Cosatu said it would back any action that its affiliate Saccawu took to save jobs, and said it believed the move was a response to the threat to PicknPay posed by the takeover of Massmart by US giant Walmart.
“We predicted that this would lead to retrenchments in other retail companies as they struggle to compete with this global giant, and Pick n Pay is proving us right,” Cosatu said.
But analysts believe Pick n Pay’s announcement has very little to do with the Massmart-Walmart deal and more to do with the re-engineering of the group as it tries to curb its “ludicrously high” cost base.
Pick n Pay’s annual report puts salaries, wages and other benefits at R4.3-billion.
“They’ve been the best payers in the industry, with the best benefits. So it must have hit really hard for them to do this,” Absa Investment analyst Chris Gilmour said.
Once the leader of the South African retail pack, Pick n Pay has increasingly come under fire on labour relations issues and lagging growth. It has found itself playing catch-up with rivals Shoprite and Woolworths after a series of errors in the past few years.
PicknPay opened its first store in Maputo, Mozambique, in June.
The group operates two stores in Zambia, 17 in Namibia, 12 in Botswana, seven in Swaziland and one in Lesotho. It has a 51-store network with TM Supermarkets in Zimbabwe.
Among South Africa’s big retailers, the group has the smallest portfolio outside South Africa, while Shoprite has the largest.
PicknPay has been preoccupied with its R1.5-billion sale of Franklins, in Australia, to Metcash, based in Sydney. Regulatory issues are stalling the sale, which was meant to help fund the group’s capital expenditure.
“A lot of what’s happening … is the culmination of a confluence of strategic errors that opened the door for Massmart: entering Australia, not concentrating on general merchandise in their hypermarkets, not putting in centralised distribution timeously and not keeping ahead of the pack with IT,” Gilmour said. – I-Net Bridge