Critics Slam SCP Over Mein Real Store Closures and Job Losses
Verdi, a labor union, has chastised SCP, the owner of Mein Real, after the hypermarket chain announced plans to close 45 stores and potentially impact over 3,500 employees. Heino Georg Kaßler, Verdi's state secretary for retail in North Rhine-Westphalia, accused SCP of neglecting its responsibilities and forcing taxpayers to cover insolvency costs.
Mein Real, which is still in insolvency and under self-administration, will only offer long-term employees two and a half months of pay due to capped severance payments.
The company announced plans to sell 18 of its 63 stores to competitors like Rewe, Kaufland, and Edeka. However, the remaining 45 stores will be closed by March 31, 2024, as no buyers have been found for these locations. The business will continue as usual in affected stores until the end of March 2024.
Mein Real revealed that the transfer of the 18 stores would provide 1,500 employees with long-term employment prospects. The company originally had over 5,000 employees, including head office personnel.
SCP acquired the Real chain of 276 stores from Metro in 2020 with the intention of breaking it up and selling it on. Kaufland, Edeka, Globus, and Rewe obtained a significant number of the most appealing stores. Following an interim sale, the company returned to SCP's ownership in May.
Despite the sale of 18 stores, Mein Real plans to close 45 more, revealing the retail industry's struggles. This decision heavily impacts the sector, causing significant job losses and contributing to the broader trend of retail consolidation.
Potential Reasons for Closure
- Financial Struggles: High operational costs, inflation, and intense competition from online retailers can contribute to financial difficulties.
- Market Shifts: Changes in consumer behavior, such as a shift towards online shopping, can decrease foot traffic and sales.
- Operational Challenges: Issues with supply chain management, inventory, or logistics can impact operations and profitability.
Comparison with Other Retailers
- Big Lots: Closed stores due to financial challenges and competition, ultimately filing for bankruptcy[4].
- 99 Cents Only Stores: Closed locations due to the COVID-19 pandemic, inflation, and shrinkage, with some acquired by Dollar Tree[4].
- Macy’s: Announced store closures to focus on small-format stores and improve online presence[4].
These examples suggest that retail closures often stem from financial difficulties, market shifts, and operational challenges. The resulting job losses and potential market realignments underscore the importance of adaptability in the retail sector.
