Contracts, what happens in large-scale distribution?
Problems, tensions, challenges and scenarios on the renewal of the national labor contract in large-scale distribution. The in-depth study by Mario Sassi , author of Blog-Notes on work
The other day I was chatting with a good store manager of a Milanese brand. The argument was the difficulty in motivating the team these days, the young people who struggle to accept this type of job as never before and the presence of more marked resignations than some time ago. He complained that the so-called "internal customer" was not at all a priority for anyone to manage. Beyond the proclamations of individual signs. One of his jokes got me thinking though. In times of inflation, of postponed national contract renewals, of fairness or otherwise of wages, there is not much sobriety in the declarations of the brands themselves. I understand the need of many managers or small entrepreneurs to see their excellent work confirmed by underlining the 2022 results and the 2023 premises as a title of personal merit or that of their teams. In times of inflation we should never forget the economic and social context in which those results are achieved. "Internal customers" and economic and political dynamics of the country included.
INFLATION AND SUPPLY CHAINS: WHAT HAPPENS IN LARGE DISTRIBUTION
There is an ongoing tug of war with the upstream supply chain over the responsibilities of price increases, there is talks with the Government to obtain some useful support on the subject of reducing the tax wedge, consumers are perplexed and undecided with those who blame the increases and the sector is under attack for its obvious social insensitivity. In this context, underestimating one's role and the consequent responsibilities towards one's collaborators does not signal foresight. It is difficult to keep one's results and the protection of one's customers on two separate levels on the one hand with the economic consequences involving all one's collaborators.
Although in the preliminary estimates, in June 2023, the national consumer price index recorded a zero change on a monthly basis and an increase of 6.4% on an annual basis, from +7.6% in the previous month, the situation is well highlighted by the recent work of the Centro Studi di Confindustria. The cost of foodstuffs rose by an average of 11.4% (26% in the lowest quintile) while that of restaurants by 6.5% ( data from the Confindustria Study Centre). A sharp reduction in household spending should be noted: -3.7% in 2022 and -8.7% in the fourth quarter of 2022 compared to the first quarter of 2021. A "ballast" for total consumption, considering that food expenditure is worth 14% of the total, second only to those for housing (including bills). An income effect can also be hypothesized, with less well-off families having accumulated fewer savings and now suffering a greater erosion of real income, with an impact above all on food consumption.
The rope could break soon and the general perception plays against the sector. Carlo Bonomi, President of Confindustria, has just declared it. “manufacturing has seen GOM fall 5% since 2019 but wages have grown 5%. The imbalance comes from Commerce and the construction sector.” Obviously when it comes to Commerce in general, large-scale distribution is the first to end up on the accused's bench given that small trade, catering and tourism during the pandemic have taken a series of "slaps" which, however things will go, the characteristics of those sectors will change.
The internal divisions, the competition between brands and associations that represent them, the pressure of the upstream supply chain have made any single defense attempt clumsy and insufficient and has canceled the interventions put in place to cushion the inflationary effects. The imbalance caused on household income is too deep. Especially those with lower middle incomes. Everything that was put in place, albeit in good faith, to mitigate its effects was seen as a marketing operation. The accentuated nomadism of the customers is a confirmation of this. So more sobriety and less proclamations would be needed.
THE RENEWAL OF CONTRACTS IS STOPPED (AGAIN)
The renewal of trade and large-scale retail contracts is once again at a standstill. The difficulty of reaching a conclusion in a polycentric negotiation with too many supporting actors on stage is evident. Confcommercio, Confesercenti and Federdistribuzione have been marking their territory for months to demonstrate that they are not behind anyone. Some seem to have understood that, having reached this point, rather than great ambitions for innovation and modification of the text, it is better that the cost of renewing the contract be as low as possible. Among other things, the main companies do not seem willing to push the rope too much. They "smell" more than the associations, that the wind is changing. And it's a headwind.
Confcommercio, on paper, certainly has the greatest responsibility but does not seem to want to shoulder it. The President, in other times, would have already intervened. Confcommercio has been looking for support from the government for some time on the tax reduction of contractual increases (which does not exist) and keeps the GDO on the ropes for old grudges. As announced, there will be a tax reduction on thirteenth and overtime payments but only for the lowest incomes (from 25,000 to 35,000 euros). Obviously it is better for Federdistribuzione and Confesercenti to sketch out. They have no convenience in disengaging. A mess that is difficult to untangle.
Filcams CGIL, Fisascat CISL and Uiltucs are in the trenches. They cannot count on power relations because they are against them. For years now, national contracts have not been renewed with mobilizations but thanks to the ability of the parties to find useful compromises. The union is aiming to close because inflation is also seriously affecting workers in the sector. A multiple signature on substantially similar texts would effectively sanction a return to a common path of the various employers' associations. Politically, that would be a good result. Expectations these days are not very high. However, the HICP (harmonised consumer price index) stands out on the horizon, signaling a possible increase due by 100 euros at the 4th level to be re-parameterized upwards for the other levels. I imagine stomach aches. Obviously companies are seriously concerned about costs. This is why the lack of capacity for synthesis at the negotiating table is surprising. The last CCNL expired in 2019 and in the meantime the so-called "pirate contracts" are proliferating. Even between realities represented by the associations that contest its adoption. And it is not a sudden and recent phenomenon.
From the 1990s onwards, the first alternative collective agreements to the confederal system were developed. Through these parallel systems, the reduction of labor costs is achieved in a relatively legal and articulated way. Contractual institutions disappear, the classification of workers changes, the minimum wages are compressed. The result is a reduction ranging from 15 to 20% of the labor cost for each employee. In the GDO and not only there are dozens of local companies that have adopted them, creating a real dumping between companies. These are not issues to be underestimated. The renewal of the National Collective Labor Agreement is a key step in addressing the knots of the category in the coming years. And what happens at the main table? Nothing. Thus justifying the double track.
On the one hand, the lack of interest in the main CCNLs and on the other, the acknowledgment of the adoption of alternative texts which dismantle, among other arguments, the heart of contractual welfare. A great result especially for Confcommercio, no doubt about it! An increasingly difficult drift to get back on track. Especially if the negotiators instead of closing a game in extra time, continue to throw the ball in the stands.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/contratti-grande-distribuzione/ on Sun, 16 Jul 2023 05:58:02 +0000.