Archive

Posts Tagged ‘Tesco’

Tesco’s 10% pay increase accompanied by cuts and job losses

July 14, 2017 1 comment

The headline figure in the result of the latest Tesco pay negotiations is a pay rise of 10.57% to £8.42, in Tesco’s own words its “biggest ever pay award”. And it is far higher than the pay rises of 2% or less that I received when I used to work for Tesco.

Scott Jones, Usdaw East London C026 branch chair (personal capacity)

But in the detail below the headlines it’s revealed that this rise will take place over the course of the next two years, straight away meaning that the increase is actually just over 5% a year. And this increase comes after small or no increases in the last couple of years.

Another blow will be the decrease in Sunday and bank holiday pay from time and a half to time and a quarter, which in Usdaw’s Network magazine for August is flippantly brushed aside with the justification that most companies already pay a flat rate for bank holiday working. And inflation is currently running at around 3%.

So while a pay increase of 5% is welcome, against a backdrop of cuts in terms and conditions, now and previously, this is merely playing catch-up. And while Usdaw members will have different opinions over the pay deal, the fact that yet again Tesco workers don’t get a vote on it means there is no accountability.

And as one Tesco worker commented to me, with the estimated 1,100 potential job losses at its call centre in Cardiff and possibly more at head office, Tesco is moving money around the company as opposed to making a large investment in this offer. An investment it could afford to do, with a rise in operating profit and a £3.7 billion takeover of cash-and-carry group Booker on the cards.

There is no excuse to close the call centre in Cardiff which will be devastating for those 1,100 workers and the local area. Usdaw and the Welsh government should put as much pressure on Tesco as possible. The union in particular should ballot for strike action over this and future attacks on terms and conditions.

The Mandate trade union in Ireland brought Tesco workers out on strike earlier this year after Tesco tried to change contracts and force workers to take redundancy.

Their strike, which was extended and spread with brilliant picket lines throughout the dispute, was an inspiration to workers here and shows what’s possible. Usdaw should look to this as an example in the fight to save jobs, terms and conditions and to secure a £10 an hour real living wage for all.

Solidarity with Tesco Ireland Valentine’s Day strike

February 8, 2017 Leave a comment
Poster produced by the Activist for use in solidarity selfies with the Tesco workers strike in Ireland

Poster produced by the Activist for use in solidarity selfies with the Tesco workers strike in Ireland

Up to 15 Tesco stores in Ireland will face strike action on Valentine’s Day 14 February after members of the trade union Mandate, which represents more than 10,000 workers at the company, voted 78% in favour of a walkout over contract changes.

Scott Jones, Usdaw East London Retail branch chair (personal capacity)

The changes Tesco Ireland are attempting to force through without agreement affect approximately 250 workers employed before 1996. The new contracts would result in some workers experiencing reduced incomes of up to 15% along with increased ‘flexibility’.

Tesco began their attack on pre-1996 staff more than one year ago when they intimidated and bullied more than 900 workers out of their jobs through a redundancy programme and strike action was narrowly avoided then.

The remaining 250 workers want to stay in the company on the contracts they have but the company is insisting they accept reduced terms and conditions.

This followed moves at Tesco in the UK to drive down terms and conditions last year when hundreds of staff lost out as a result of the pay deal which caused pay cuts in overtime, weekend and night premiums. Meanwhile Tesco CEO Dave Lewis received £4.1 million in his first six months as boss in 2015 and Tesco reported that it had its best sales growth at the end of last year’s quarter for over five years. This profit was further boosted by the Christmas sales meaning that Tesco is on course to deliver a profit of “at least” £1.2 billion for 2016-17.

As one Tesco worker said then: “I’d rather have a living wage than support the lifestyles of shareholders.”

We support Tesco workers in Ireland and their trade union Mandate for taking this action against Tesco’s attempt to implement increasingly low-paid, part-time precarious work in its stores. And we call on Usdaw, the shop workers’ union in Britain, to raise solidarity and discuss industrial action so that the strength of the 160,000 Usdaw members in Tesco is used to fight against low pay and attacks on conditions.

We would encourage all Usdaw reps and other labour movement activists who wish to support the strike to send solidarity messages to the workers via their website (https://tescoworkers.com/contact-us/) and also send copies to usdawactivist@gmail.com. We have produced a poster (see image above) that can be printed out to take ‘solidarity selfies’ and photos with to be shared on social media, tag @MandateTU on Twitter

Activist 66

February 1, 2017 Leave a comment

Includes interview on the North West Executive Council by-election, Tesco buyout of Booker and Weetabix strike ballot.

Activist 60: Tesco Pay Deal Special

February 15, 2016 1 comment

Includes articles from retail workers about the Tesco 2016 Pay Deal

Activist 55

February 23, 2015 Leave a comment

Includes articles on Usdaw EC elections, Minimum Wage, Scottish Labour Party, Tesco crisis, ADM £10 an hour proposition, John Hannett interview in Progress

 

Tesco: Workers Shouldn’t Pay for the Bosses Mistakes

January 11, 2015 Leave a comment

2014 has been a year of gloom for Tesco. Share prices have fell to a 14-year low on Tuesday 6th January 2015, coming after falling profits, corruption in the board room and an overhaul of Tesco’s leadership.

Scott Jones, candidate for Usdaw EC South Wales & Western division

Tesco’s first trading statement of 2015 brought further profits warnings, news of cuts and further attacks on workers. The supermarket giant is set to close 43 ‘unprofitable’ stores, mostly smaller expresses, reduce and relocate its head office and do away with the final salary pension scheme for all staff. It says everything about the bankruptcy of capitalism that this brutal downsizing was met with a sharp rise in the share price!

However, Tesco’s own profit predictions remain in the billions at £1.4 billion and their market share remains a little under three times that of discounters Lidl & Aldi combined. Even when Moody’s announced on Friday a reduction to junk status of Tesco’s short-term debt, it stated that its profit margin would only be reduced to 3-4%.

Despite this Tesco is attempting to balance the books and return to super-profitable ways on the backs of its already low-paid workers. The only ways for a commercial retailer like Tesco to boost profits is to increase sales or cut costs and new CEO Dave Lewis has chosen the latter, with unprecedented store closures and the final nail in the coffin that is a Tesco pension.

Scandalously, Usdaw, the shop workers’ union released a statement which immediately ‘recognises that change is inevitable’ and ‘noting the difficulties facing Tesco’ when it should be immediately pledging to fight against any job losses and attacks on terms and conditions and demanding that Tesco open the books to prove the ‘unprofitability’ of the 43 stores set to close.

In contrast, Unite, which represents many Tesco drivers, demands that Tesco workers should not be made to pay for the failure in the boardroom. However, it is Usdaw that represents the overwhelming majority of Tesco and other supermarket workers and it’s these workers who also need a fighting leadership prepared to take on the bosses now more than ever.

In the union’s upcoming elections Socialist Party members will be building support for the candidates endorsed by the union’s Broad Left. These include Socialist Party members & Tesco workers Scott Jones, who is standing for the Executive Committee (EC) in the South Wales and Western division and Amy Murphy who is standing for re-election to the EC in the Southern division as well as for President of the union.

Categories: Updates Tags: , , , ,

Tesco’s financial fiddling

November 2, 2014 Leave a comment

Eight executives suspended and the chairman resigned, whilst Tesco shares have also dropped by 10%. Moody’s, a ratings agency has also downgraded Tesco’s credit rating and now they are being investigated by the Serious Fraud Office – this is the toll so far inflicted by the over-stating of profits over the last few years by senior figures at Tesco, the UK’s largest retailer. The report released by Deloitte’s found that £263m had been overstated this financial year, with more in previous years. Executives had been fiddling its figures by paying suppliers late and taking new goods on credit.

Already facing trying to finance a plan to aim to recover retail sales, these latest revelations will put even more pressure on Tesco’s new CEO Dave Lewis. An issue of shares to raise the funding for this seems ruled out given the drop in share value and that Tesco’s market valuation is slightly less than its total outstanding debt to bondholders on £13.95bn (although this is returned over a period of time).

It’s increasingly likely that Tesco will be forced to sell some of it’s assets, including the stake in the Harris + Hoole coffee chain or Dunnhumby who created the Tesco clubcard, whilst potentially floating is Asian business or Tesco bank separately from the main company. Tesco also owns 310 sites that were purchased for out of city stores, but would be reluctant to sell that given the possibility of competitors opening on those sites, as part of a total £20bn in property assets.

Tesco profits for the last six months have dropped by 91% to £112. As one Tesco investor was quoted in an article, which had expected Tesco to post profits of £909m for the last six months, said “It is a distinct possibility that they could ‘kitchen sink’ the numbers, either now or before the full-year results, so the new team has a low base to start from.” This appears to be the direction Tesco management are going in to recover from this scandal.

Will the Big Supermarkets Survive?

The woes of all the major supermarket chains, including Tesco, are a result of a number of factors. Firstly, the saturation of the supermarket sector with increasing difficulty in obtaining planning permission, but also the sheer spread of supermarkets now means new openings increasingly cut into the sales of existing stores. Retail analysts IGD now suggest the big-box retail as a whole will see sales drop by £3bn whilst online, convenience and discount stores will increase sales by £30bn.

Tesco still has a whopping 28.8% share of the UK grocery market, still far more than its nearest rival Asda with 17.3% and Sainsbury with 16.1%. Despite Aldi & Lidl’s growth, the former still trails with 4.8% and the latter has an even smaller market share. Whilst Aldi’s pre-tax profits for last year reached £260.9m, both Lidl and Adli’s profit growth was halved compared to previous years.

Not only are Aldi & Lidl starting from a much smaller base than Tesco, but their present advantage lies in the fact that they have much reduced number of staff available in stores and also stock a limited number of products. A typical Aldi has 1,350 lines (95% of which are own brand), as opposed to the 25,000 in a typical Tesco. Rather than completely replacing the big supermarket chains, they have rather eaten into sales of some of the lines stocked by the big supermarkets with shoppers heading to Aldi/Lidl first then topping-up with items at the nearest big supermarket.

Whilst there is still room for growth of this model, there is a limit to how far this can expand – especially as Aldi and Lidl run out of completely new locations to site stores. In France, Lidl has then sought to introduce more upmarket elements, including fresh bread, to make further progress but then this cuts away their competitive advantage. Whilst Aldi has recently reported that its average number of items bought is now 16.6 compared to 16.9 at Tesco, a survey by IGD showed that only 12% use the various discount stores as their main food store compared to 51% who have used them in the last month.

The Problem is Capitalism

The problem is not that Tesco will not continue to dominate the UK grocery retail market, but that it cannot generate the continually increasing profits that investors demand. For years Tesco has given out ‘industry-leading’ dividends of 15%, based on its rapid growth and dominance of the grocery retail sector. This in all likelihood will never be the same again.

This is because despite shifting their focus to online and convenience stores, where Tesco again leads the retail chains in this sector, these generally generate less profit that the equivalent investment in superstores had. As Tesco attempts to restore its profits, it will be forced to take other measures – this could mean limiting the numbers of stores open 24-hrs a day, but also is likely to see a continuation of the attacks on staff pay, terms and conditions which have taken place over the last few years.

The partnership agreement between Tesco and USDAW allowed for share issues through the ‘Save as you earn’ scheme to staff and this obviated the unions responsibility to fight for better pay for USDAW members. Many workers use the shares as a saving scheme for a rainy day, holidays or presents for the family particularly around this time of the year, the value now being somewhat less than what Tesco workers will have expected. Share issues to staff, instead of improving basic pay, have become a further shameful episode in the reign of John Hannett (general secretary) and Jeff Broome (president) of USDAW.

All this shows the limitations of food retail under capitalism. This is why socialists argue for bringing the key sectors of the economy, including the major food retailers into public ownership under democratic workers control and management. On that basis, their resources can be used to improve pay and conditions as well as invested in improving life for workers and customers, rather than squeezing all these things to maintain the shareholders dividends.