At the end of June 2007, the French retail group Carrefour announced to the trade unions its decision to close 16 GB stores located throughout Belgium. The well-known network of GB supermarkets became part of the Carrefour group in 2002 when they were sold by the Belgian group GIB. This network of supermarkets, encompassing the superstores SuperGB and MaxiGB – which was making considerable losses at the time – enabled Carrefour to establish its name in Belgium. The medium-sized shops kept the GB name, while the larger ones were transformed into Carrefour superstores.
The management of the French supermarket giant Carrefour has announced its intention to close 16 GB stores in Belgium. GB, a well-known network of supermarkets, was sold to the French group in July 2002. The closures will probably result in the loss of 900 jobs out of the 5,502 people employed at GB. Trade unions fear that these closures will give rise to new franchise stores with poorer working conditions.
At the end of June 2007, the French retail group Carrefour announced to the trade unions its decision to close 16 GB stores located throughout Belgium. The well-known network of GB supermarkets became part of the Carrefour group in 2002 when they were sold by the Belgian group GIB. This network of supermarkets, encompassing the superstores SuperGB and MaxiGB – which was making considerable losses at the time – enabled Carrefour to establish its name in Belgium. The medium-sized shops kept the GB name, while the larger ones were transformed into Carrefour superstores.
Some five years later, the French group has been unable to reach its objectives of 5% profit with a turnover increase of 0.5% in the GB stores. Moreover, competitiveness in the large-scale distribution sector has recently increased because of the establishment of discount stores in the localities covered by Carrefour. This lack of profitability led the management to take the decision to close the 16 least cost-effective GB stores. The stores concerned are located throughout Belgium but particularly in areas with low purchasing power.
Carrefour aims to reduce its overall running costs, including wage costs. According to a Carrefour spokesperson, ‘our global costs are increasing faster than our turnover. Besides, we have to take into account the average length of service of the staff, which is 17 years, and this contributes to increased wage costs.’ These closures are likely to result in the loss of 800 jobs in the stores and 100 jobs in central services, although the management has promised to reduce the impact of direct dismissals by offering early retirement in the first instance.
No discussion before September
The restructuring decision was announced just before the beginning of the summer holidays. Trade unions were aware of a possible restructuring but were surprised by its scope. The two unions involved are the National Federation of White-Collar Workers (Centrale Nationale des Employés/Landelijke Bedienden Centrale, CNE/LBC) and the Belgian Union of White-Collar Staff, Technicians and Managers (Bond der Bedienden, Technici en Kaders/Syndicat des Employés, Techniciens et Cadres, BBTK/SETCa). Furthermore, the trade unions refuse to participate in any negotiations before September 2007 for the reason that many workers are away during the summer period and students are working in the stores, temporarily covering for permanent employees. This would limit the effectiveness of any action taken by the workers. Nevertheless, several strikes have taken place in the stores concerned, which were supported by the customers.
Possibility of franchise stores
The trade unions announced their opposition to the idea of Carrefour turning the shops affected into franchise operations, a possibility which was not denied by the Carrefour spokesperson. A franchise store – that is, a store owned by an independent manager but keeping the name of Carrefour and selling Carrefour brand products – would allow the group to free itself of the wage costs, which become the responsibility of the franchisee, while still retaining a part of the profits.
Moreover, the workers in franchise stores do not benefit from the same working conditions as the workers in Carrefour stores, as franchise outlets are not subject to the same joint committee (commission paritaire/paritair comité) agreements (BE0706039I). Workers in superstores are under the jurisdiction of the joint committee 312 for large-scale distribution, while workers in franchise stores are covered by agreements of joint committee 201. In the latter case, wages are 35% lower than under the 312 committee and weekly working hours stand at 38 hours instead of the 35 hours in the superstores. Furthermore, franchise stores are often open on Sunday morning. In general, inferior working conditions arise due to the absence of trade unions in these stores (BE0704019I).
Originally, the 201 joint committee covered small shops owned by self-employed people with one or two employees. Now, it is becoming common practice for large-scale distribution groups to transform their units into franchise stores. The trade unions consider that this situation has led to inferior working conditions and has put pressure on workers in superstores to accept lower wages and working conditions in order to keep their jobs.
Emmanuelle Perin, Institute for Labour Studies, Catholic University of Leuven
Eurofound recommends citing this publication in the following way.
Eurofound (2007), Supermarket giant to close 16 stores nationwide, article.
