(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Flailing supermarket chain Mega may lay off as many as 2,000 workers as it tries to figure out a way forward for its business.
Various Israeli media sources reported that the chain was trying to sell between 30 and 52 of its branches to competitors who were uninterested in maintaining the staff, but all agreed that 2,000 workers were facing termination.
The Histadrut Labor Federation is intervening, and is scheduled to meet with both the union and management Thursday morning.
For several years, the once-booming supermarket chain has struggled.
"They didn’t have any unique point. They were just another store. But they didn’t have a good private label program, rented out too many square meters of space, and changed the names and formats of their store every other day," said Eari Shahar, founder of Ehad supermarkets, one of a recent wave of new markets competing for Israeli food shoppers.
The costs of too much rented space, in particular, are problematic, he noted.
“It’s like an occupied territory. First they took over and then realized ‘what do you do with it?’” he said.
Gil Unger, a former Mega executive and current director of Cofix (which also just opened its own supermarket chain), told the Jerusalem Post recently that the competition in the market space was very high.
“I’m afraid that, yes, one of the chains will not exist in the next year,” he said.