Faced with ‘local moves’, CFDT is suing Carrefour over its social policies.

CFDT condemns ‘local relocations’. The union’s services branch announced this Monday that it will summon the distribution giant Carrefour to the Evry judicial court, accusing it of selling numerous stores to third-party companies. The union plans to switch many stores to rental and franchising. “We believe that this management method practiced by Carrefour is not in accordance with the law and has very serious consequences for workers,” explained Sylvain Mace, national secretary of CFDT Services.

The union is asking the courts to “prohibit the Carrefour group and the defendant companies from carrying out new rental or franchising operations within the group” and to “enforce this prohibition with a fine of €100,000 per person.” Violation noted.” according to the text of the order. Since CEO Alexandre Bompard took over Carrefour in 2017, more than 300 stores have been transferred to third parties, franchisees or manager-tenants, representing 23,000 employees leaving the workforce, according to CFDT.

Consequences for employees

The distributor, which has more than 5,000 stores in France, has long positioned itself as the country’s leading private employer but has not disclosed the number of people it employs for several years. Staff representative organizations, including the CFDT, have consistently criticized the increasing use of franchising and rental management in recent years.

These terms indicate the transfer of management of points of sale to third parties. For Carrefour, this move allows it to maintain its commercial market share while freeing itself from a certain number of costs, starting with wages. In addition, the franchisee receives supplies from the group headquarters, which places the franchise company in the role of a wholesaler.

But this is not without consequences for employees. Once their store has “changed”, they no longer operate in a large group included in the CAC 40, but in a smaller structure. After a transition period, they lose the social benefits agreed with Carrefour, which the CFDT estimates amount to an average of €2,000 per year. The distributor defends this policy by ensuring that it avoids closing its least profitable stores, reopens operations and preserves jobs.

“Activity is even worse than before”

“The activity is even worse than before,” testifies Pascal Junet, elected CGT to the CSE of the Carrefour de Bercy 2 store in Charenton-le-Pont in the Paris region, which was put into rental administration on May 2, 2022. “The figure is ‘Business is in constant decline and the only answer is to say the payroll is too high.’ CFDT is also dubious about whether contracts awarded to franchisees “do not achieve sufficient results.” “The model imposed on franchisees and tenant managers ends up putting pressure on employees,” who become the only room for maneuver to improve store profitability, says Sylvain Macé.

The trade unionist joins the analysis of former distributor executive Jérôme Coulombel, who, in a book published in September 2023, calculated that the distributor was imposing too high wholesale prices or external services on franchisees and managers. The Association of Carrefour Franchisees announced in January that it had taken the distributor to court in Rennes, deploring the “significant imbalance between the rights and obligations of each party.”

According to Carrefour, Jérôme Coulombel’s argument “contradicts the attractiveness” of the franchise. The brand further states that Jérôme Coulombel’s “professional activity” since his departure has been to advise franchisees to join competing groups.

Another irritant for unions is that the policy comes at a time when Carrefour is spending hundreds of millions of euros to reward its shareholders. The distributor, which posted a net profit of €1.66 billion for 2023 on turnover of €94.1 billion, paid €481 million in dividends in 2023 and spent €802 million on share repurchases.

Beyond the CAC 40 giant, CFDT is concerned that the entire mass distribution sector is “moving towards a model that is a form local relocation, where we bring social issues to life.” Auchan recently said it wants to move toward more franchising, a model that Casino also supports. This movement takes place in the context of strong dynamism among independent store brands, such as the leader E.Leclerc, Intermarché or Système U, where each owner of one or more stores is free to determine his own social policy.