Pick n Pay – a 100% Namibian-owned entity that employs a total of 1931 employees at its 22 retail stores in most major towns in Namibia and subsidiary of the Ohlthaver & List (O&L) Group – has officially announced that it will be restructuring its operations in an effort to set the business on a path to sustainability.
Pick n Pay Managing Director, Graeme Mouton: “Due to the prolonged economic downturn and reduced consumer disposable income, the company experienced marginal to negative turnover growth over the past five years. Furthermore, while the recession has steadily eroded turnover, costs have increased annually above inflation on all fronts, resulting in a decline in profit, leading to losses over the last two years. A restructure exercise aimed at reversing losses and setting the business on the path to sustainability was therefore initiated. In addition to various cost cutting measures, the company also offered employees voluntary separation packages and early retirement options. Uptake on these offers were however low, resulting in extensive dialogue through which the company presented the employees with the option of retrenchment or alternative measures aimed at reducing costs without job losses.”
In March 2020, in an attempt to avoid retrenchments, Pick n Pay engaged the Namibia Food & Allied Workers Union (NAFAU), with which the company has a recognition agreement, to propose various alternatives to retrenchment. The following proposals were presented to the Union leaders for consideration:
- That the employees agree to forgo the annual salary increase and to forgo a 13th cheque this year, but that going forward, the 13th cheque would be converted to a performance based bonus whereby bonuses will only be paid once the company is profitable.
- That the cash card discount benefit which Pick n Pay employees enjoy, be reduced.
- That Sundays be included in the normal 6 day working week, calculated monthly instead of weekly as is currently the case.
Mouton continued: “As you are aware, the O&L Group is passionate about people, and therefore all efforts were made to identify alternative measures to save the business while guarding as many jobs as possible. COVID-19 and lockdown only compounded an already dire situation, necessitating business realignment in order to secure the business and jobs into the future. Various rounds of discussions with the Union and shop stewards were unfortunately unsuccessful in finding an alternative to retrenchments. We also considered the proposals presented by the Union, however these options did not deliver the cost savings required to sustain the business. The employees, through the Shop stewards and Union, regrettably rejected the company’s proposal, opting to rather follow the retrenchment route.”
The Pick n Pay retrenchment will result in more than 500 Namibians becoming unemployed.