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Johannesburg - Thousands of workers at grocery chain Pick n Pay Holdings [JSE:PWK] plan to strike for higher wages this week, a union official said on Thursday.
At least 25 000 workers led by the South African Commercial, Catering and Allied Workers Union (Saccawu) are threatening to strike from Friday if they do not receive a 12% wage hike.
South Africa has been hit by a series of strikes and strike threats, which have led to pay settlements well above the current inflation rate of 3.7%.
Pick n Pay is already struggling with high costs, analysts say, and is facing difficulties with the planned sale of its underperforming Australian unit.
"Pick n Pay expenses are already too high, so a higher settlement will be damaging," said a Johannesburg-based analyst, who declined to be identified because he is not allowed to speak to the media.
"The strike will not be in their best interest either, it will magnify these tough trading conditions."
Pick n Pay reported a flat full-year profit in April and said it expected business to remain tough. Expenses equalled about 16% of its full-year revenue.
Separately, Pick n Pay said the close of the sale of its Australian unit, Franklins, had been pushed back until November, due to enquiries by Australia's competition watchdog.
Pick n Pay said in July it would sell its underperforming Franklins business to unlisted Metcash Trading for about R1.3bn.
But it said on Thursday it had received requests for further information on competition issues from the Australian Competition and Consumer Commission.
Pick n Pay said it will provide further information to the commission by October 15, and expects a decision by November 11.
Shares of Pick n Pay were down 1.1% at R43.50 by 13:07, compared with a 0.5% decline in Johannesburg's Top 40 index.
At least 25 000 workers led by the South African Commercial, Catering and Allied Workers Union (Saccawu) are threatening to strike from Friday if they do not receive a 12% wage hike.
South Africa has been hit by a series of strikes and strike threats, which have led to pay settlements well above the current inflation rate of 3.7%.
Pick n Pay is already struggling with high costs, analysts say, and is facing difficulties with the planned sale of its underperforming Australian unit.
"Pick n Pay expenses are already too high, so a higher settlement will be damaging," said a Johannesburg-based analyst, who declined to be identified because he is not allowed to speak to the media.
"The strike will not be in their best interest either, it will magnify these tough trading conditions."
Pick n Pay reported a flat full-year profit in April and said it expected business to remain tough. Expenses equalled about 16% of its full-year revenue.
Separately, Pick n Pay said the close of the sale of its Australian unit, Franklins, had been pushed back until November, due to enquiries by Australia's competition watchdog.
Pick n Pay said in July it would sell its underperforming Franklins business to unlisted Metcash Trading for about R1.3bn.
But it said on Thursday it had received requests for further information on competition issues from the Australian Competition and Consumer Commission.
Pick n Pay said it will provide further information to the commission by October 15, and expects a decision by November 11.
Shares of Pick n Pay were down 1.1% at R43.50 by 13:07, compared with a 0.5% decline in Johannesburg's Top 40 index.
