Explainer: Massmart announces 1 500 retrenchments as stores close

Explainer: Massmart announces 1 500 retrenchments as stores close

- South Africa is battling through a time when employment rates are at an all-time low

- In the midst of this crisis, retail giant Massmart has announced that it will be implementing retrenchments

- Briefly.co.za explores the reasons behind this move in Mzansi's difficult economic climate

PAY ATTENTION: Click “See First” under the “Following” tab to see Briefly.co.za News on your News Feed!

Retail group Massmart, which owns Game, Makro and Builders Warehouse, among others, has announced that it is closing a total of 34 stores across the nation.

This move is set to affect 1 440 jobs at a time where South Africa needs the opposite to happen, desperately.

With unemployment rates currently around 29% of the countries workforce, this has served as a devastating blow to job creation.

In a statement released on Monday, Massmart explained the reasons for its decision to cull its herd of stores:

“The Massmart Group has recently conducted a store optimisation project that highlighted a number of underperforming stores in its portfolio. We will commence the potential store closure consultation process in terms of section 189 and section 189A of Labour Relations Act 66 of 1995, as amended; with organised labour. 34 Dion-Wired and Masscash stores and around 1 440 employees are potentially affected.”

READ ALSO: Ramaphosa on unemployment: We are in deep and serious crisis

Low-performance levels in certain shops had evidently prompted the company to review its standing, with slow sales and high operational costs influencing the decision.

The group, owned by American retail giant Walmart, owns brands like Game, Makro, Builder's Warehouse, Cambridge Foods, Jumbo and Dion-Wired.

The group's shares responded positively to the decision, with its share price rising by around 4% following the announcement to streamline its operations.

Briefly.co.za reported that President Cyril Ramaphosa had dubbed the high unemployment rates a 'national crisis'.

The politician has called on industry in South Africa to do its best to invest wisely, encouraging citizens to buy local goods in an effort to boost both jobs and the economy.

Enjoyed reading our story? Download BRIEFLY's news app on Google Play now and stay up-to-date with major South African news!

Source: Briefly.co.za

Online view pixel