The Hungarian Tesco rebellion

Tesco’s dominant presence in Hungary is perhaps both a curse and a blessing, when seen from the perspective of social justice. On the one hand, those on the left who are vocal advocates for shopping locally, supporting local small business, buying eco-friendly and fair trade merchandise are often situated in the upper middle class and can actually afford shopping on their neighbourhood’s Main Street. Those on more modest incomes rely, not just in Hungary but in the West as well, on relatively affordable food, clothing and other necessities available at major box stores. Britain’s Tesco and France’s Auchan are the two multinationals that dominate the box store scene in Hungary. The British chain employs more than 24,000 Hungarians and operates 222 locations across Hungary, from medium-sized corner stores called Tesco Express to the large hypermarket locations. After running a loss for the first time in Hungary in 2014, Tesco closed 13 of its locations and cut 500 positions. This was in response to punitive new legislation enacted by the Orbán government, which aimed to benefit pro-government Hungarian companies, such as the CBA supermarket franchise, and hinder multinationals. Firms like Tesco saw some of their fees and taxes rise 30-fold and the Hungarian government also requires any company looking to open retail space of over 400 square metres to go through challenging red tape, in order to obtain the necessary permits. Hungary in the last fifteen years saw the rapid expansion of massive shopping malls and box stores, and this is something that the Fidesz party has long wanted to limit.

The overall policy of limiting the expansion of box stores and plazas can be a good one, especially from the perspective of the environment and also the health of local small businesses, but in Hungary’s case, a driving motivation was the hope of giving an advantage to prominent businesses with close ties to the ruling party.

Tesco’s employees in Hungary are paid dismally. The average full-time store clerk takes home between 70,000 forints and 80,000 forints per month (around $320 to $370). Tesco employees in Britain, for instance, make between three to four times this amount. The low wages, even by Hungarian standards, mean that many of those who work for Tesco often do so as a last resort or only stay on as long as it takes them to find work elsewhere. Loyalty among employees is low, and this year–as the retail market approaches the critical holiday season–Tesco is learning this the hard way.

The Tesco store at Budapest's Arena Plaza shopping mall.

The Tesco store at Budapest’s Arena Plaza shopping mall.

Last month, the company decided to make changes to its holiday work schedule, effectively hindering any real opportunity for thousands of employees to spend a relaxing and meaningful Christmas with their families. Many of the store’s staff will be required to work until around 5 pm on December 24th, which makes it almost impossible for workers to get home in time and prepare a Christmas meal for the family. It’s worth remembering that the majority of Hungarians celebrate Christmas Eve with a family dinner and Christmas Day is generally a somewhat quieter holiday. Most of the staff who will be impacted are women and often in small towns or in rural Hungary. The workers impacted the most negatively are those who stock shelves during the graveyard shift. While many of them will have to work into the late afternoon on December 24th, they will also have to return to work on December 26th.

It looks like this may have been the final straw for many, and waves of workers are quitting their jobs at Tesco, just as the busiest shopping season approaches. The Magyar Idők (Hungarian Times) pro-government daily writes that mass resignations are already under way, while many other employees are planning on calling in sick in December.

A union representing the interests of retail workers (Kereskedelmi Dolgozók Független Szövetsége) noted that Tesco, which bills itself as being family-friendly, should bring in more seasonal workers for peak shopping times, especially from among students. At the moment, the remaining workers at many Tesco locations will go into the holiday season understaffed, overworked and with their usual very modest wages.

The Orbán government is looking at drafting new legislation to regulate the HR policies of large multinationals like Tesco. Fidesz  may even be able to count on some support from the opposition Hungarian Socialist Party (MSZP), which seems totally lost in the political wilderness, even after over five years in opposition, and has failed to rebuild its brand and reinvent its message. Tibor Szanyi of MSZP, speaking to the right-wing Lánchíd Rádió suggested that the party may, indeed, support new regulatory measures.

For the meantime, however, it looks like workers are taking matters into their own hands and are using whatever limited means are at their disposal to pressure Tesco into providing them with better working conditions. The fact that employees seem to be protesting and applying pressure in an organized and strategic manner is a positive sign. It’s certainly much healthier than passivity or docility. Standing up for social justice issues is an integral part of civil engagement. That having been said, Hungarian workers and the economy will not be well-served if Tesco were to pull out of Hungary (there was some chatter about this earlier in the year), even if its current dominance of the supermarket sector is not especially healthy. The Hungarian democratic opposition — especially parties like MSZP–should play a lead role in empowering workers and in proposing reasonable policies or legislation that addresses the concerns of those in the retail sector who are the most vulnerable and exploited.

If there ever was a time and place for the Socialists to get involved in a cause that could help redefine themselves and their image, it is this one.

2 Comments

  1. Tesco has many stores in Thailand under the name of Tesco Lotus.

  2. Charlie London says:

    70,000 to 80,000 Fts per month is a comparable wage in Hungary.

    Trained, skilled nurses get 80,000 to 100,000 per month.

    So Tesco’s is paying a market rate under these comparisons.

    ‘Workfare’ labour undercuts even these low wages. People are sacked when doing menial jobs only to go ‘on the social’ to do the same job for even lower ‘dole’ money.

    Compounded by the flat tax which is regressive and results in the low payed paying a higher percentage of their wages in tax.

    Finally add to all this the seemingly institutionalised ‘black economy’ and it’s no wonder the wage system is in chaos.

    Who wouldn’t avoid taxes in these circumstances?

    Low pay is an ever decreasing spiral downwards.

    It’s the rotten system – not of Tesco’s making.

    Don’t get me started on those awful CBA stores – rude, dirty, expensive, corrupt with re-cycled ‘use-by’ dates.

    By comparison Tesco’s is a shopping paradise. (Even if everyone is grumpy and un-smiling.)

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