Managers at Sainsbury's Al haram branch have reportedly told many of the stores' workers would no longer be required, and that they should submit their resignations. Reportedly the workers have no recourse. They are unable to bring a lawsuit against the company since they are still on a three-month probation period and do not yet have fixed contracts.
This latest move contradicts the British retail chain's earlier promises. When Sainsbury's first entered the Egyptian market, company officials insisted they would reduce local unemployment by offering stable jobs at high salaries. For three months, the company employed thousands of Egyptians at attractive salaries.
Recent problems altered the picture, and at the Al haram branch, 150 of the 500 workers have been forced to resign. Employees were told that the company had no choice, since monthly profits of EP500,000 have dropped to EP240,000. Worker representatives refuse to accept this logic, stating that it is normal for sales to fall during the summer months.
Sainsbury's invested EP500 million in the Egyptian market in an effort to allure customers by undercutting the prices of their competitors. Its first branch opened in the low-income Shubra neighborhood and the company intended to have 200 branches in Cairo by the end of the year.
By May 2000, Sainsbury's Egypt operated from 100 supermarkets and neighborhood stores in the Greater Cairo area and employed over 2,500 local workers. It recently commenced testing of a new store formats, with other operators trading under the Sainsbury's banner.
Stores range in size from 1,000 square feet up to 28,000 square feet and stock up to 15,000 lines. The comparatively large sales area enables the stores to offer more choice than the local competition, with a greater perishable range and more international brands. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
