Delhaize ends social peace to streamline organisation

Belgian supermarket chain Delhaize says it needs a more efficient organisation in its supermarkets, so it is cancelling the current collective labour agreement on its in-store organisation. The unions are not amused.

Uncertainty and unrest

The Ahold Delhaize subsidiary informed the unions on Thursday about its intentions to cancel the collective labour agreement. That regulates the functions, tasks and working hours of staff in the shops. “We have to terminate the old one to be able to conclude a new agreement. We will start dialogue on this in the coming weeks. We see that there is a need for a more efficient organisation within the shops”, a spokesperson told Belgian newspaper Het Nieuwsblad.

The unions have quickly responded to the bombshell: “This will mark the beginning of a new turbulent period at Delhaize and cause a lot of uncertainty and unrest among the staff”, secretary Wilson Wellens of the liberal trade union warned.

Cost savings

This does not come as a big surprise for analysts, however: it is well-known that the Belgian chain is an underperformer in terms of profitability within the Ahold Delhaize group, even if the chain is still profitable. A previous reorganisation of work in the shops did not lead to the desired results.

Presenting its financial figures last Wednesday, CEO Frans Muller said the company will be paying even closer attention to costs to safeguard shrinking margins. Like all retailers, Ahold Delhaize is struggling with high costs and strong price pressure. At its headquarters, it seems inevitable that some positions will disappear.