Massmart, the owner of Game stores that suffered billions of rand of losses due to the July riots and is in the middle of a turnaround attempt to fix years of underperformance, faces a new headache after a union representing about half of its workforce said it will go on strike.
The SA Commercial, Catering and Allied Workers Union (Saccawu), which claims about 20,000 of retail giant Massmart’s 45,000-strong workforce, said it will embark on an indefinite strike from Friday over wage increases and looming retrenchments. The union also called for a boycott of Massmart stores from November 22, which would be another unwelcome headwind ahead of the holiday period.
The retailer, owned by Walmart, the largest company in the world by revenue, has been struggling to shake off the effects of Covid-19 and the associated lockdown restrictions that saw it lose billions due to government-imposed bans on alcohol sales.
The July unrest in KwaZulu-Natal and Gauteng brought more setbacks for the group when two of its warehouses were looted and one burnt to the ground, with 43 stores damaged.
The looting, arson and store closures during the civil unrest cost the owner of Game, Makro and Builders Warehouse R2.5bn, and it also had to meet a R650m insurance shortfall.
The planned strike comes as most shoppers and retailers look forward to the annual shopping bonanza of Black Friday, which falls on the fourth Friday of November and has become a money-spinner for retailers.
Speaking to Business Day on Tuesday, Saccawu spokesperson Sithembele Tshwete said the union had received three certificates of non-resolution from the Commission for Conciliation, Mediation and Arbitration (CCMA) relating to a retrenchment process at Game affecting about 400 workers, as well as issues around wages and a unilateral change to conditions of employment.
On wages, Tshwete said the union had been demanding a R500 increase across the board and had rejected Massmart’s proposal of R320.
“The company is also unilaterally changing the conditions of employment of the group’s customer relations officers. They are taking away the car allowance and have not given any reasons why they are doing all of this,” said Tshwete.
“An indefinite strike is the only way to knock sense into management. We see a company that is hell-bent on bashing the union. Friday, we are going all out, we have already galvanised workers.”
Tshwete said all of Massmart’s 229 stores across the country would be affected by the strike.
Massmart senior vice-president of corporate affairs Brian Leroni said in a statement that the rationale for the strike was not clear.
“Massmart has implemented the necessary strike contingency plans including the deployment of Massmart experienced temporary employees who are familiar with our processes to ensure the continued smooth operation of our stores,” he said.
Leroni said the group did not envisage that the strike would have much effect on the Black Friday promotion.
News of the strike had no noticeable effect on investor perceptions of the company, with its share price rising 0.8% to R71.54, giving it a market-beating gain of 70% for 2021, compared with 41% for the retailers index and 19% for the all share index. It was among the hardest-hit shares in the wake of the pandemic, dropping to R18.84.
CEO Mitchell Slape, a Walmart veteran, has embarked on a turnaround strategy that has included closing unprofitable stores. The company lost more than R1bn consecutively in 2019 and 2020.
“Makro, Game and Builders are releasing new Black Friday deals each week during the full month of November, rather than on a single day. These deals are released on a Monday, Tuesday and Wednesday each week rather than on a single Black Friday,” he said.
Update: November 16 2021
This story has been updated with additional information.
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