Union leadership representing most Pick n Pay Namibia employees does not expect any retrenchments emanating from the Ohlthaver and List’s (O&L) Group’s termination of its franchise agreement with the South African retailer.
Penda Jakob, the secretary general of the Namibia Food and Allied Workers Union (Nafau) yesterday said official engagement will be guided by the letter of the law.
Nafau is the representative union of the majority of Pick n Pay employees.
In 2022, Pick n Pay Namibia boasted a staff complement of about 1 700 people, of which more than 74% were in the Nafau bargaining unit.
“We are guided by law, and therefore we will be directed by the Labour Act. We are not expecting any negative impact on employees. We will engage in proper discussion as the representative union. We have received written notification from our social partner to ensure we won’t lose any employees or conditions of employment. We will engage Pick n Pay Namibia to do the right thing in terms of the law”, Jakob told New Era yesterday.
Pick n Pay Namibia and Nafau signed a substantive agreement on 10 July 2023 which is valid until 30 June 2024.
The agreement is applicable to all bargaining unit employees of the retail company.
O&L operates 19 Pick n Pay- branded retail stores in Namibia under a franchise agreement with Pick n Pay South Africa.
On Monday, the O&L Group announced the termination of a 27-year-old franchise agreement with Pick n Pay South Africa that will come to an end by 30 June 2025. O&L’s announcement comes as the Pick n Pay Group reported a 373% decrease in net profit, down from a R1.17 billion profit to a R3.2 billion net loss for the year that ended 25 February 2024.
A turnaround strategy entails the retailer closing or converting more than 100 stores in South Africa.
Pick n Pay South Africa was established in 1967, and remains one of the largest retail chains in the region, including stores in Namibia, Botswana, Zambia and Zimbabwe.
“Our priority has always been to serve our Namibian customers with excellence, and to contribute positively to our local economy. We have formally notified Pick n Pay South Africa of our decision, and we are committed to a 12-month transition period, effective 1 July 2024 until 30 June 2025, to ensure a smooth and orderly transition.
“During this time, we will focus on minimising any disruptions to our employees, customers and business partners. Change is the only constant, and we believe this change will bring growth and innovation,” stated Sven Thieme, O&L’s executive chairman.
“We are committed to a 12-month transition period to ensure a seamless changeover with minimal disruptions. Our focus is on creating value-added retail experiences that benefit all our stakeholders,” he added on social media.
An O&L statement issued on Monday noted the group is committed to retail, and is “exploring the best way forward to create consistent value-added retail experiences, ultimately benefitting all our stakeholders. While we appreciate the long-standing partnership we have had with Pick n Pay South Africa, we are confident that this decision aligns with our commitment to being a more customer-centric and Namibian market-oriented business, staying true to our essence of being authentic, caring and passionate. We look forward to embarking on this transformative journey”.
While O&L has been tight-lipped about what exactly will happen after the termination of the Pick n Pay franchise agreement, with Thieme playing the cards very close to his chest, speculation is rife this would be an opportune time for the establishment of a truly Namibian retailer to rival regional competitors.