The South African Commercial Catering and Allied Workers Union (Saccawu) has rejected Pick n Pay’s proposed overhaul of its store labour model, warning that the retailer’s section 189A process could push workers out despite assurances that no jobs will be cut.
The union said it does not accept the retailer’s position that the process will not lead to job losses, and pointed to potential reductions in guaranteed working hours and benefits that could affect take-home pay.
“We don’t believe them,” said Saccawu deputy general secretary Jerry Mmoneri.
The comments come after Pick n Pay said on Monday that it had initiated the consultation process as part of its turnaround strategy, which includes resetting its cost base and improving operational efficiency.
About 71.4% of Pick n Pay’s more than 30,000 employees are union members. More than 22,000 workers are affected by the consultations, according to Saccawu.
Mmoneri said Saccawu was formally notified of the process after the company issued a media statement, following earlier engagements in which no clear confirmation was given that section 189A would be triggered.
The benefits under review were secured through years of negotiations and industrial action and that the union and its members are not prepared to concede them, he said.
“We went on strike. [The benefits] did not come on a silver platter. We are not prepared yet to move, not by an inch,” he said.
At the centre of the dispute are proposed changes to guaranteed working hours, bonuses, and conditions of employment.
Pick n Pay CEO Sean Summers told Business Day that while the process is not intended to reduce headcount, there are no guarantees. He confirmed, however, that working hours would be reduced, and the hourly pay rate would not change.
Reducing guaranteed hours would directly affect workers’ earnings, even if hourly wage rates remain unchanged, Mmoneri said.
He raised concerns about changes to Sunday work, which Pick n Pay claims to be paying double for, and pay structures, as well as the possible removal of bonuses, saying that the proposed changes will be rejected.
Pick n Pay said the consultation process is part of a broader effort to align its cost base with market conditions as it continues a multiyear turnaround.
“If we achieve what we hope to, we will have a more efficient labour model and have a cost base that is aligned with the market,” the company said adding that the process is intended to be “genuine and open” and that outcomes will depend on engagement with the union and affected employees.
The retailer said it cannot yet quantify potential cost savings, as these will depend on the outcome of consultations. It also signalled that new hires would not be halted, but it said that “critical vacancies will be filled as required”, with communication ongoing throughout the process.
Turnaround strategy
The labour reset forms part of Pick n Pay’s wider turnaround strategy, which has already included a recapitalisation to restore its balance sheet, store closures and conversions, and restructuring of support office functions. According to its latest annual report, the group has reduced trading losses, with losses in its core supermarket business cut by more than two thirds.
The company has also taken steps to improve operational performance, including closing or converting loss-making supermarkets during the 2025 financial year and stabilising like-for-like sales growth.
Yet, employee costs remain a key pressure point. The group reported employee costs of R6.4bn for the year, with underlying cost growth reflecting selective hiring and costs associated with store closures.
Labour-related risks, including “escalating employee costs” and potential “labour unrest or declining morale”, were flagged as high in the company’s annual report.
The section 189A process also comes as Pick n Pay works to build what it describes as a “future-fit” structure, aimed at improving efficiency, reducing structural costs and aligning operations with changing customer behaviour. This includes improving in-store labour productivity and better aligning staffing with peak shopping periods.
Analysts say investors will closely watch the outcome of the process.
MP9 Asset Management chief investment officer Aheesh Singh said the company remains in a long-term recovery. Investors are waiting for evidence that the strategy is translating into financial performance, he said.
“The market is effectively telling management we’ll believe the turnaround when we see it in the numbers. Investors are discounting the list of turnaround initiatives until they see evidence of improved profit margins and stronger cash generation from the core business.”
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