In Belgium, Delhaize has 764 points of sale. 636 stores are franchised under the names AD, Proxy and Shop and go. On the other hand, 128 supermarkets are managed by the group and are affected by the decision that management announced today. “People are a strength of Delhaize“, says Xavier Piesvaux, CEO of Delhaize Belgium. “What these self-managed stores lack is the dynamism brought by entrepreneurship, local roots, reaction to local customers and the additional service that can be provided.“
Many differences
These group stores are less profitable and are losing market share, unlike franchise stores. These offer different schedules with openings on Sundays and public holidays for example, often smaller surfaces with less inventoryof personnel plus flexibleespecially students, and more successful independent directors. “They live in these areas“, explains Xavier Piesvaux. “They grew up in these areas. They ensure that business options are fully aligned with customer expectations. And they have a way of operating their store that is simpler and more efficient.“
Today, Delhaize supports more than 23,000 people, including 9000 in the stores of the group which tomorrow must change boss. With guarantees according to management. “The employment contract of each employee is preserved“, specifies the CEO. “If he does not work on Sunday, there is no obligation to work on Sunday. Our affiliate partner will have to find solutions if they wish to open on Sunday.“
Management does not anticipate any store closures. This transformation plan will be spread over several months or even several years.
“Fear of unions partially justified”
Pierre-Alexandre Billiet, economist and CEO of Gondola, a group specializing in the distribution sector, analyzes the situation. “Fear of unions partially justified“, he said. “Delhaize nevertheless gives guarantees. But the change is so important, unheard of in Belgium, that we will have to see how it will evolve in the days and weeks to come.“
Working under the franchise system is a choice already made by other groups such as Intermarché. “For supermarkets, this is the future“, says the economist. “For the hard-discount, much less. In supermarkets, the franchisee can energize his store because it is often his life.“