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Choppies Sends 583 Employees Home

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The Kenyan market has proved a hard nut to crack for Choppies Supermarkets which has in the recent past sent 583 workers packing.

Court documents show that the retail chain is struggling in the ultra-competitive retail market freshly shaken by the entrance of private equity-backed retailers which has led to a series of mergers and acquisitions that have given some players an upper hand.

Documents show that in November 2019, 486 workers were declared redundant while 97 others opted to quit.

This came hot in the heels of a dispute between the retailer and the Kenya Union of Commercial Food and Allied Workers after it emerged in September last year that the retailer was mooting an exit from the Kenyan market over poor performance. The union had expressed serious concerns that the Batswana retailer would exit without settling amounts owed to the laid-off staff in full.

“486 employees were declared redundant by a notice dated November 15, 2019…51 employees were declared redundant at Nanyuki by notice dated October 31, 2019, while 46 employees exited employment for other reasons other than redundancy,” read the documents.

Documents show the percentage of workers who have already left Choppies account for by 72% of the retailers 799 unionisable workers.

It gets worse, the remaining employees, according to the union are putting up with a struggling business.

September 2019, the retailer announced that it was planning to sell its assets in Kenya and classified 12 of its 15 stores in the country as distressed.

In 2019, the retailer closed its Kiambu, Nanyuki, and Bungoma outlets amid rising operational costs.

“The group has decided to downscale the business in Kenya region by reducing the number of stores to nine from 15. Offers are already in place for two stores and initial discussions are happening for the other stores. This decision has been taken due to the ongoing distressed business in Kenya region,” Choppies said in a statement.

Choppies shook the Kenyan market four years ago after acquiring 75% stake in Ukwala Supermarkets at an estimated cost of Ksh1 billion, the remaining shares are held by the local shareholder — the Export Trading Group (ETG).

ETG recently offered Choppies a Ksh600 million shareholders loan in a bailout aimed to settle suppliers’ dues that had stopped the free flow of stock.

See Also>>> Boardroom Fallout Pushes Choppies into Financial Crisis

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BT Reporter
BT Reporterhttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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