The company informed social partners of its plans for Belgium at an extraordinary works council in Brussels on Wednesday. Delhaize says that in order to guarantee its future it needs to press ahead with its commercial strategy more quickly by investing an extra 450 million euros between 2015 and 2017. In order to pay for these investments Delhaize indicates that 2,500 may be lost and 14 stores shut.
The company also has plans to optimise store organisation and support service procedures. Wage and working conditions may be changed to bring wages in line with the competition.
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The supermarket chain says that compared with its partners it is experiencing a growing structural wage cost handicap. Delhaize stores have also suffered as a result of the continuing difficult economic climate. Market share and profitability of stores operated by the company itself has come under pressure.
Delhaize is invoking the Renault Law and has pledged to work with social partners in a bid to avoid sackings.
Delhaize has identified the 14 stores under threat of closure: Aarschot, Berlaar, Diest, Dinant, Eupen, Genk (Stadsplein), Herstal, Kortrijk ring, La Louvière, Lommel, Dendermonde (Oude Vest), Tubize, Turnhout and Schaarbeek (Verhaeren).
The plans should not impact directly on AD Delhaize, Proxy Delhaize and Shop & Go stores. Delhaize Luxemburg, Red Market, Tom & Co and Caddy Home too should not be affected.
At the end of March 2014 the company operated 854 stores in Belgium and employed a workforce of 15,000. In 2013 Delhaize Belgium generated a turnover of 5.1 billion euros and held a 25.5% market share.
Market expert Gino Van Ossel of the Vlerick Management School identified two big difficulties that Delhaize faces: "The company faces a heavy cost structure. Moreover in recent years market conditions have changed considerably: rivals Aldi, Lidl and Albert Heijn have expanded significantly eating into Delhaize's market share."