Stock image via Envato Elements
Retail group Massmart said on Monday that it had commenced a consultation process in terms of the Labour Relations Act, which could see the closure of 34 stores and affect 1 440 jobs. Around 7.5% of all positions are set for retrenchment after the multi-million rand business came to this decision. Following the announcement just before midday, the company share price rose by almost 4%.
Massmart retrenchments – what shops are affected?
Massmart owns brands such as Game, Makro, Builder’s Warehouse, Cambridge Food, Jumbo and CBW. Their portfolios in construction and cash-and-carry outlets are amongtst the most competetive in the respective industries. It said the ongoing process would affect Dion-Wired and Masscash outlets, too.
The news comes in an era where unemployment has reached one of its lowest ebbs in South Africa. With almost 29% of the workforce out of a job, news like this is a crushing blow for an economy in desperate need of a kick start, rather than a kick in a teeth. It’s especially bruising for President Cyril Ramaphosa, who continues to “prioritise” job creation without any tangible results.
Why the likes of Makro, Game and Builder’s Warehouse are facing retrenchments
Massmart, whose parent company is U.S. multinational retail corporation Walmart, issued a very brief statement earlier in the day. They confirmed that low-performance levels in certain stores had influenced their decision to cut losses. Slow sales and high operational costs have also been attributed to the closures.
“The Massmart Group has recently conducted a store optimisation project that highlighted a number of underperforming stores in its portfolio.”
“We will commence the potential store closure consultation process in terms of section 189 and section 189A of Labour Relations Act 66 of 1995, as amended; with organised labour. 34 Dion-Wired and Masscash stores and around 1 440 employees are potentially affected.”
Massmart statement on upcoming retrenchments
The Massmart Group (Game, Makro, Builders Warehouse & others) has begun consultations of potential store closures and retrenchment of some employees. The Group says 34 Dion-Wired and Masscash stores and approximately 1 440 employees are potentially affected by this process
— Thando Maeko (@HelloThando) January 13, 2020
