Massmart, a South African retailer that operates Games Stores, will close its Kenyan stores on or around December 25, laying off hundreds of workers.
The Johannesburg Stock Exchange-listed company says it has informed all of its associates and employees of the impending closure in a letter to the Kenya Union of Commercial Food and Allied Workers (“the Union”).
The notice was also forwarded to the Labour Officer.
As a result, the firm issued a one-month redundancy notice in accordance with Section 40 of the Employment Act.
“As you are aware, on 4 October 2022, the Company issued notices to all associates and the Kenya Union of Commercial Food and Allied Workers (“the Union”) informing them that due to various reasons, the Company is proposing closing all stores in Kenya,”
“A copy of the notice was also issued to the Labour Officer. As a result of the proposed store closures, the Company gave associates and the trade union 1 months’ notice of redundancy in accordance with section 40 of the Employment Act,” Hassan Van Wyk Senior ER Specialist said in a statement.
Last year, the retailer announced plans to close three stores in Kenya in order to focus on its core competencies.
It also began exit strategies in Nigeria (five stores), Ghana (four stores), Uganda (one store), and Tanzania (1 store).
“We have reached the conclusion that performance and complexity in running the 14 stores in five markets in the East and West Africa is something frankly that we needed to address,” Massmart Chief Executive Mitchell Slape said during the group’s virtual financial results presentation last year.
Massmart began discussions with employees about closing plans earlier this month after failing to sell the local unit as well as those in Uganda, Tanzania, Ghana, and Nigeria.
The closure will result in the layoff of hundreds of Kenyans at a time when the country’s unemployment rate is extremely high.
Walmart, the American retailing behemoth, owns Massmart. It debuted in Kenya in 2015 with Game Stores at the Garden City Mall. It later opened stores at Karen’s Waterfront and Kisumu’s Mega City Mall.
In many African countries, game stores sell fast-moving consumer goods (FMCG) as well as non-perishable groceries.
South African firms have struggled to break into the Kenyan market, leading to the exit of brands such as magazine publisher Media24 and household goods retailer Supreme Furniture, among others.
The company has invited the union and its representatives to discuss terminal benefits and whether there are any ways to mitigate the negative effects of redundancy.
“We confirm that we have received a proposal from the non-union representatives and will meet with them to discuss the proposals they have made.”
“We also request the Union to provide us with their proposals regarding terminal benefits and whether there are any means to mitigate the adverse effects of redundancy by no later than Monday, 30 October 2022 so that we may set up some time with them to discuss their proposal.”
