Tuskys loses Sh100m in day-long strike over salary review

Tuskys Supermarkets lost nearly Sh100 million following a day-long shutdown of its stores after the chain’s workers went on strike.

The chain’s 45 stores were closed on Thursday but re-opened Friday after Tuskys reached a settlement with its workers.

Officials at the retail chain estimate that the strike cost the top retailer about Sh100 million based on average monthly sales of Sh2.6 billion the store rakes in — pushing its annual sales to Sh32 billion.

The 7,000 workers, through the Kenya Union of Commercial Food and Allied Workers (KUCFAW), were protesting the failure by the retail chain to effect a 10 per cent wage rise agreed in November, the withdrawal of overtime pay and house allowances.

“The parties agree that payment of general overtime be reinstated immediately and be reflected in the January 2014 payroll pending further discussion by the parties,” reads part of the pact signed by the union and Tuskys before the Nairobi County Labour officer, Francis Okello.

Tuskys entered the collective bargaining agreement (CBA) committing to raise the basic minimum wage for its employees by 10 per cent in the year from March this and by 11 per cent from March 2014.

The agreement also entitled Tuskys employees to at least a day off in a week, 23 leave days per year, overtime pay at double the normal hourly rate, lunch break, house allowance and paid sick leave.

Before the agreement, the workers had two off days per month, 21 leave days and had their overtime pay withdrawn.

The overtime allowances range between Sh8,000 monthly for the lowest paid worker and a maximum of Sh13,000.

The truce, brokered by Labour ministry officials, is a major relief for Tuskys that was staring at hundreds of millions of shillings in lost revenues had the strike persisted given that Christmas and New Year festivities are the peak season for retailers.

Aggressive expansion

Tuskys has expanded aggressively recently, doubling its revenues from Sh12.9 billion in 2008 to Sh25.2 billion in 2011, according to financial statements provided to the court.

The workers’ strike highlights the push for better salaries in Kenya’s retail sector that is gripped by a vicious market share war and thinning margins, which also prompted a pay dispute between Uchumi Supermarkets and its workers in October.