The fact that the franchising of 128 integrated Delhaize supermarkets is now really getting underway, gives all concerned the benefit of clarity. The food retailer is pushing ahead, but will have to increase the pace to reach its goals.
When the Belgian chain announced that the first fifteen stores have been given over to franchisers, it evoked varying emotions among those involved. Relief may prevail at the headquarters, because the major franchise operation is now finally really starting. After months of fiercer-than-expected protests and massive sales losses, this is a boost for the retailer’s management. They can now show that prospective buyers will not be deterred by alleged extortionate contracts and threats from activists who promise to make the stores “unsellable”.
The fact that the first list of acquirers – with five affiliates, five employees and five “external” parties – is a suspiciously balanced reflection of the three types of entrepreneurs Delhaize is counting on, can not be a coincidence. This is clever communication to prove that the business case is sound – and to boost confidence. It may also indicate that Delhaize is indeed keeping a lot more candidates in reserve, despite rumours about “a mass drop-out” of candidates. We will find out more in the coming months.
The press release features pride and enthusiasm from the acquirers, who have a strong bond with the Delhaize brand and are convinced of the potential of “their” shop. They speak conciliatory language to the employees involved. Regardless, it will be a huge challenge to restore morale and motivate the teams.
Remarkably, this first list immediately includes some of the most difficult stores in the whole dossier: in front of the doors of Brussels stores like Hankar and Flagey, employees have been asking customers for months to show solidarity by boycotting the shop. Turnover there has plummeted, the atmosphere is totally ruined. In other words, the challenge in stores like these is enormous. That does not stop the entrepreneurs from going all out anyway, though: they are not intimidated, which shows guts and a strong belief in the shops specifically and the Delhaize brand in general.
Benefit of the doubt
Among the unions, anger still prevails. They had already shelved the illusion that Delhaize would be willing to talk about alternatives to the franchise plan, and for their other main demand – a beneficial settlement for those who leave voluntarily – they can not have much hope left either. While they have announced new actions, but the question is how much support there still is for these – and what they want to achieve with them.
Indeed, opinions in the stores are very divided. In supermarkets in the North, the teams seem willing to give the takeovers the benefit of the doubt, and make the best of it. The first reactions in Knokke and Ronse are rather positive, we read in the regional press, but comments in other Flemish supermarkets like Izegem are more hesitant. In Nivelles and Brussels, frustration and anger take the upper hand, with a number of off-and-on strikes.
Only the beginning
Of course, this is only a beginning. Selling the first fifteen shops is a piece of cake, and the next fifteen should not be all that hard. The last shops might be a different story, though. Besides: at a leasurely pace of fifteen shops every two months, this operation will not be completed next year. The speed has to increase. And only then, the actual work starts: motivating employees, winning back customers, revitalising the supermarkets after a long period of uncertainty and negative press. And that in a turbulent market where competition is only increasing…
In short: the game is not yet won for Delhaize, but at least it has finally started. For what it is worth, this new phase in the future plan offers all parties involved the benefit of clarity. They have reached the point of no return: there is no turning back now.