Shoprite taken to court by aggrieved workers in Namibia as it inches closer to its official exit from Kenya

NAMIBIA – Workers of giant retailer Shoprite in Namibia are hopeful things will turn in their favour after the High Court ordered the retailer to stop hiring seasonal workers to perform the duties of aggrieved employees currently on a nationwide strike.

The company recruited 390 new employees to replace the workers who have been striking since 27 December last year due to low wages and unfair working conditions, reports The Namibian.

To this end the Namibian Food and Allied Workers Union (Nafau) took the retailer to court stating that it had violated industrial action rules.

“They will do the right thing from today when we get the court order that we’ll use to get access to Shoprite. The workers are happy and relieved of the worries they had,” said Nafau secretary general Jacob Penda.

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Meanwhile, the South Africa headquartered chain is set to exit the Kenyan market by the end of this month with the closure of its Nairobi head office.

Shoprite entered Kenya two years ago, hoping to capitalise on the collapse of erstwhile retail giants Nakumatt and Uchumi, but failed to break even in a market that has characterized with stiff competition and seen the exit of both local and international companies.

The final straw for Shoprite came in the form of record losses in excess of Sh3.2 billion (US$29.1m) in the 2019/20 financial year.

Shoprite is set to exit the Kenyan market by the end of January

The retailer has notified Kenya Union of Commercial Food and Allied Workers that it will shut its head office this month and that it has sent redundancy letters to employees.

“In line with the company’s decision to exit the Kenyan market, it intends to permanently close its home office. It is contemplated that the proposed closure will cause employees of the said office to be declared redundant and therefore the termination of their employment contracts on the account of the redundancy,” reads part of the letter.

The redundancy will affect seven employees, marking the end of the brand in the country.

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The retailer has so far closed all its four branches – Westgate Mall, Garden City, Karen Waterfront and City Mall in Nyali, Mombasa.

The South African-owned retailer follows in the footsteps of other foreign retailers that have found it hard to crack the Kenyan market, including Botswana-based Choppies, which had entered the market by acquiring a majority stake in struggling local retailer Ukwala in 2016.

Local retailers have also found the going tough in recent years, a situation that has been exacerbated by the Covid-19 pandemic.

Other than Kenya, Shoprite has been reviewing its long-term options in Africa as currency devaluations, supply issues, and low consumer spending in Angola, Nigeria, and Zambia continued to weigh on earnings.

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