Carrefour Belgium has signed a deal with trade unions that will allow it to restructure its operations in the country.
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The agreement means that 16 loss-making stores will be closed at the end of July 2010.
These nine hypermarkets and seven supermarkets have been posting operating losses for several years. Some five supermarkets will be re-opened under the Carrefour Market banner franchises.
The union has also agreed to measures that will reduce labour costs by around EUR25m (US$31.31m) a year through the revision of a number of social measures and a cap on wage increases.
The company will extend its relationship with the Mestdagh Group through a master franchise agreement. Mestagh will take over 16 supermarkets by the end of 2010 and all of Mestagh Group’s 69 supermarkets will progressively come under the Carrefour banner.
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By GlobalDataCarrefour Belgium also plans to invest EUR100m over the next three years through the group’s ‘Reinvent the hypermarket’ initiative.
Carrefour CEO Lars Olofsson said: “Today, our new operating model is based on four key elements: the closure of unprofitable shops, an innovative wage agreement, new commercial investment and the strengthened partnership with Mestdagh. In my view, this partnership is additional evidence of the potential for profitable and sustainable growth of Carrefour in Belgium.”
The move follows four months of consultation and what became a bitter battle between the two, with strikes run by the union costing the retailer between EUR80-90m.
