Price war and high work pressure bring industrial action in large-scale retail
Publikováno: 24 February 2002
The Belgian large-scale retail sector is a turbulent one, with companies engaged in restructuring and a fierce price war to keep their customers and market shares. One result has been persistent industrial action, as trade unions claim that the greater competition is being conducted at the employees' expense. In 2001, the Carrefour chain faced a number of strikes, while a one-day strike in the entire sector preceded the conclusion of a new single collective agreement for the industry in December 2001. For the unions, the new agreement seeks to protect employees against the erosion of already low wages and against extreme forms of flexibility. Carrefour again faced strikes in January and February 2002, this time because of employee concerns about high work pressure.
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The Belgian large-scale retail sector is a turbulent one, with companies engaged in restructuring and a fierce price war to keep their customers and market shares. One result has been persistent industrial action, as trade unions claim that the greater competition is being conducted at the employees' expense. In 2001, the Carrefour chain faced a number of strikes, while a one-day strike in the entire sector preceded the conclusion of a new single collective agreement for the industry in December 2001. For the unions, the new agreement seeks to protect employees against the erosion of already low wages and against extreme forms of flexibility. Carrefour again faced strikes in January and February 2002, this time because of employee concerns about high work pressure.
The Belgian large-scale retail sector is currently going through turbulent times, with major restructuring and fierce price competition being accompanied by industrial action in some firms.
Large-scale retail sector
As in all European countries, Belgian large-scale retail is currently subject to international reorganisation and takeovers. In June 2000, the country's largest supermarket chain, the loss-making GB, was taken over by the French-based Carrefour, the second-largest supermarket chain in the world. The Belgian retail groups that mainly concentrate on food include Delhaize De Leeuw, which now has the bulk of its operations in the USA. Other groups include the highly profitable Colruyt, a Belgian family firm that has grown into a multinational group traded on the stock market, and the German-based chains Aldi and Lidl. Another factor worth mentioning is the ambiguous position of franchised companies in the food retailing subsector: these operate under the names of Delhaize or GB for example, but nevertheless have a different legal structure and are not counted as part of the large-scale retail sector.
The many chains in non-food retail form part of the large-scale retail sector, and vary in size from around 60 employees for the book club ECI, to over 900 at the Swedish-owned furniture retailer IKEA, and 1,500 at the do-it-yourself chain, Brico.
For collective bargaining purposes, there are three joint committees for large-scale retail, arbitrarily structured in a classification that has emerged over time, whereby the number of lines of business and the number of shops play a role - see table 1 below. This classification is not very effective because each committee covers widely differing companies, while there is great competition between the 'multiline' supermarket Carrefour (with a very wide range of food) and the foodstuff companies such as Aldi and Colruyt (which also sell non-food), which are covered by different joint committees.
| Joint committee | No. of employees (as at 30 September 2000) |
| Joint committee 202 (and part of joint committee 119) for foodstuff retail (large foodstuff companies with a minimum of two shops and a minimum of 25 employees, such as Aldi, Colruyt, Delhaize and Lidl). | 42,142 |
| Joint committee 311 for large retail businesses (companies with fewer than three different lines of business and with more than 50 employees, such as Blokker, Brico, C&A, Fnac, Heytens, IKEA and Zara). | 25,298 |
| Joint committee 312 for hypermarkets and department stores (companies with 50 employees or more and with three lines of business or more, such as Carrefour, Cora, Inno and Hema). | 14,790 |
| Total | 82,230 |
Source: Belgian Federation of Distribution Companies (Fédération belge des entreprises de distribution/ Belgische federatie van de distributieondernemingen, Fedis).
Single collective agreement
On 19 December 2001, a single collective agreement was for the first time reached for the three large-scale retail joint committees together, covering the period from 1 January 2002 to 31 March 2003 (BE0201323N).
Hugo Vander Elst, national secretary of the National Federation of White-Collar Workers (Centrale Nationale des Employés/Landelijke Bedienden Centrale CNE/LBC) and one of the negotiators of the agreement, described it as 'an important step'. According to Mr Vander Elst: 'In this way the working conditions of the least favourable companies are raised up to the level of the favourable ones. Some chains apply a combination of very low wages and part-time contracts with fragmented working hours. For single people and single-parent families this means merely plain concealed poverty. Improving the basic wage was thus a difficult but essential part of the negotiations.'
The agreement was preceded by some weeks of industrial action, including three regional warning actions in November 2001, and a national strike on Saturday 1 December, right in the middle of the busy pre-Christmas buying season. According to Mr Vander Elst: 'Initially we could not get around the dispute on income and improving the status of part-timers. For employers, for a long time there could be no question of a pay increase, only a one-off bonus. The fall in consumption — especially after the events of 11 September 2001 — was cited as a reason for this. There was also debate over time credits, an issue that is very important in this sector, due to the large number of women and the strong pressure from household commitments that they experience.' 'Time credit' schemes - which came into force at national level on 1 January 2002 (BE0108360F- give employees the right to interrupt their employment or reduce their hours for a certain period, without breaking off the contract of employment and without loss of social security rights.
Alongside the dispute over pay, it was important for the employers to retain the use of small-scale part-time employment contracts (in order to have enough staff on Fridays and Saturdays). Moreover, they did not want a time credit system with an obligation to replace those taking time off (organisationally a very cumbersome obligation). Ultimately, the Ministry of Labour made a number of attempts at reconciliation, and put forward a proposal on 6 December that was further fleshed out into the final agreement of 19 December.
The key points of the agreement are that:
full-time workers will receive a one-off payment of EUR 100 on 1 February 2002, and gross monthly pay rises of EUR 12.5 from 1 June 2002 and EUR 7.5 from 1 February 2003. The agreement also provides for a revaluation of travel costs reimbursement; and
for part-time workers (who make up a large proportion of staff in retail) in post for at least five years, weekly working time under contracts of indefinite tenure will rise from a minimum of 18 hours to 20 hours (or 20 hours to 22 hours) from 1 December 2002. The same measure will apply to employees with three years' seniority from 1 December 2003. The agreement also provides for a time credit scheme, whereby employees (no limit is placed on the number) are able to interrupt their careers for five years while, from the age of 50 to the statutory retirement age, most employees will be able to work half time (on reduced rates of pay). Trade unions will be informed and consulted on the people using the time credit scheme.
Persistently turbulent sector
There has been a struggle to keep prices low in large-scale retail for many years. Increases of scale are an important tool in this respect. On the one hand, keen prices can be negotiated with producers. On the other, more administration can be centralised, whereby few managers are required in the shops themselves. A successful company such as Colruyt relies heavily on information technology, allowing sales prices to be quickly adjusted to the lowest prices of the competition. The customer is also involved in this process: they can call the 'red telephone' line to report lower prices elsewhere.
Carrefour is the leading company in the Belgian market in terms of turnover, has left the confused image of GB behind it, and has started a tough price war to win over customers. Here too, customers can report lower prices offered by the competition, and Carrefour's own prices are adjusted accordingly. The former Maxi-GB stores have been turned into 56 Carrefour hypermarkets with a very wide range of branded and own-label products. The reorganisation has, however, brought about a tough management policy on employment conditions, and Carrefour is in particular trying to introduce night work. In February and March 2001 there were strikes on pay and flexibility at the firm (BE0104347N).
The current perceptions of customers of the main retail chains have been surveyed by GfK Consumerscan, and the findings (published in Trends of 17 January 2002) are set out in table 2 below.
| 'Are customers satisfied?' Scores out of 10 for: | |||||
| . | Colruyt | Delhaize | Lidl | Maxi GB | Aldi |
| Range | 8.56 | 7.43 | 7.80 | 7.27 | 7.75 |
| Prices | 8.93 | 6.95 | 8.55 | 6.93 | 8.69 |
| Cleanliness | 7.66 | 8.28 | 7.73 | 7.58 | 7.01 |
| Fresh food departments | 8.13 | 8.28 | 7.31 | 7.78 | 6.61 |
| Quality | 8.67 | 8.40 | 7.93 | 7.83 | 8.15 |
| Friendliness | 8.68 | 8.39 | 8.02 | 7.63 | 7.73 |
| Total | 8.38 | 8.00 | 7.80 | 7.58 | 7.54 |
Source: GfK Consumerscan.
The battle for the lowest prices and the widest product range can only be won by making savings elsewhere, and the only margin is in personnel costs. According to Mr Vander Elst of CNE/LBC: 'Nothing further can be saved on the wages themselves, thus the work pressure is increasing.'
This is leading to new tensions. At the end of January 2002 there were spontaneous strikes in some Carrefour hypermarkets, generally on different days. At the Drogenbos and Sint-Agatha Berchem stores, the issue was that management did not want to renew a couple of dozen temporary contracts. At Schoten, a structural employee shortage became acute after a large number of absences due to illness. In early February 2002, there were negotiations at the hypermarkets in Drogenbos and Waterloo.
Commentary
The price war in large-scale retail - being fought on the backs of employees - paints a rather grim picture of consumption in this sector. At 'hard sellers' such as Colruyt and Aldi, customers must be prepared to walk around a warehouse, picking their way among the pallets, and load goods out of cardboard boxes. At IKEA, customers must carefully immerse themselves in the products and their logistics. Customers are also expected to look on their shopping as an 'event'. There is no question of a hypermarket being an area for social contact, according to critics, and people only meet each other quite by chance. Social contact is evaluated only in terms of the friendliness of employees. The customer is viewed as an autonomous - economic - decision-maker. At Carrefour the objectives of the company include the statement: 'The customer is free to buy what he or she wants, when and where he or she wants'. The 'when' in particular sounds ominous - there is a clear readiness to push for longer opening hours for the customer.
According to the trade unions, customers are generally sympathetic to strikes in large-scale retail - a sign that the customer is not blind to the harsh working conditions in the sector. Whether consumers are prepared also to take working conditions into account in their shopping choices is another matter. Up until now, consumer organisations have steered clear of such problems. Joost Vandenbroucke of Test-Aankoop/'Test Achat' states that 'our organisation does indeed promote ethical consumerism, but only with regard to working conditions abroad. For Belgium we assume that the unions protect conditions here: it is not for us to fulfil this role. We have however become rather more wary. Thus we are not asking for opening hours in large-scale retail to be increased. The consumer seems to be satisfied with the current situation.' (Jan De Schampheleire, VUB-TESA)
Eurofound doporučuje citovat tuto publikaci následujícím způsobem.
Eurofound (2002), Price war and high work pressure bring industrial action in large-scale retail, article.
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