Nairobi — South-African retailer Massmart that runs Games Stores will close its Kenyan stores on or about December 25, rendering hundreds jobless.
In a letter notice to the Kenya Union of Commercial Food and Allied Workers (“the Union”), the Johannesburg Stock Exchange-listed company says it has informed all its associates and employees of impending closure.
A copy of the notice was also copied to the Labour Officer.
Consequently, the firm issued a 1-month of redundancy 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 sell three stores in Kenya to focus on its core strengths.
It also initiated exit plans in Nigeria (five stores), Ghana (4 stores), Uganda (1 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.
Early this month, Massmart began talks with employees on closure plans after it failed to sell the local unit as well as in Uganda, Tanzania, Ghana and Nigeria.
The closure will render hundreds of Kenyans jobless, coming at a time when unemployment in the Country is very high.
Massmart is owned by American retail giant Walmart. It first entered Kenya with Game Stores in 2015, at the Garden City Mall. It Later opened other stores at the Waterfront in Karen and the Mega City Mall in Kisumu.
Game stores sell fast-moving consumer goods (FMCG) as well as non-perishable groceries in numerous African countries.
South African firms have found it hard to crack the Kenyan market prompting exits for brands like magazines publisher Media24, household goods outlet Supreme Furniture, among others.
The firm has invited the Union and the representatives to engage with it on terminal benefits as well as whether there are any means to mitigate the adverse 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.”