The retailer axed 486 workers in November 2019 while 97 others quit months earlier, documents filed in court reveal.
Choppies last year announced plan to sell more than half of its 15 stores amid struggles to grow market share in the increasingly competitive retail market.
The sale plan comes four years after the Botswana retailer acquired Ukwala stores for Sh1 billion as a launch pad for its East Africa entry.
Choppies Supermarket has fired 583 workers in recent months as the retail chain struggled to survive strained cash flows and heightened competition for Kenya’s shopping basket.
The retailer axed 486 workers in November 2019 while 97 others quit months earlier, documents filed in court reveal.
The court documents followed a dispute between Choppies and Kenya Union of Commercial Food and Allied Workers over fears the retailers would quit Kenya without settling dues of the laid off staff.
“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,” documents say.
The workers who left Choppies accounted for 72 percent of the retailer's 799 unionisable workers, reflecting the troubles of the supermarket chain.
Choppies last year announced plan to sell more than half of its 15 stores amid struggles to grow market share in the increasingly competitive retail market.
The sale plan comes four years after the Botswana retailer acquired Ukwala stores for Sh1 billion as a launch pad for its East Africa entry. It has shut a number of stores as the retailer experienced stock outs amid rising operation costs.
Botswana retailer Choppies, which owns 75 percent of the Kenyan unit, has written off Sh1.6 billion from the local subsidiary.
The Johannesburg listed retailer informed investors that its inability to access loans led to stock outs in the Kenya operations, which posted a loss of Sh248.7 million in the delayed 2018 results. The Botswana-based retailer, which operates more than 130 stores in its home market, South Africa and Zimbabwe, bought a 75 percent stake in Ukwala Supermarkets for Sh1 billion with the remaining shares held by local shareholders—Export Trading Group (ETG).
ETG recently offered the Kenyan unit of Choppies a Sh400 million shareholders’ loans in a bailout aimed to settle a supplier debts that had restricted fresh stocks.
The local shareholders also guaranteed a Sh250 overdraft from I&M Bank Limited in debt deals that will see it acquire additional stake in Choppies Kenya if the loans are not settled.
Recently, Choppies has been relying on loans including a Sh300 million facility from Barclays Bank of Kenya to steady its Kenyan operations, the parent company says in the earnings report.
Southern African retailers have been performing poorly in the rest of Africa forcing them to retreat back home.
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