Workers of CU operator BGF Retail form union over bonus cuts

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Workers of CU operator BGF Retail form union over bonus cuts

Published: 14 Jun. 2024, 14:42 Updated: 14 Jun. 2024, 17:55

KIM JU-YEON
kim.juyeon2@joongang.co.kr

Customers line up for an event held at a CU convenience store in June 2023. [YONHAP]

Workers at BGF Retail, the operator of the CU convenience store chain, have formed a union amid growing dissatisfaction over bonus pay cuts, becoming the first labor union in Korea’s convenience store industry.

The BGF Retail branch of the Korean Finance & Service Workers’ Union had its founding meeting on Wednesday and elected Kim Bok-jin as the organization’s head, the union said Friday.

BGF Retail recorded its highest sales ever last year, but reduced performance-based bonuses by around 30 percent for workers and increased the amount of dividends paid to the company’s owning family and shareholders. Workers had demonstrated against the decision with protest trucks early this year.

“We will grow the union in a way that will benefit both the company and the workers,” the newly-elected Kim said. “We will work toward securing the rights and welfare of employees with the company’s healthy growth and development in mind.”

BGF Retail said in a statement on Friday that workers' bonuses had been reduced on year because the firm had "failed to meet its business objectives" for 2023.

"The company applies the same rate for performance-based pay to all executives and employees based on the achievement rate of the set management goals," the firm said.

The company also said it applied the same equation as last year to calculate dividend yields for it and its shareholders, and that the dividend payout ratio was at the industry's "standard level."

CU is Korea’s largest convenience store chain in terms of both the number of franchise stores and operating profit.

The retail firm recorded 8.2 trillion won ($5.9 billion) in sales and 253.2 billion won in operating profit last year, with respective on-year increases of 7.6 percent and 0.3 percent. Company Chairman Hong Seok-joh took a total of 8.93 billion won in dividends from BGF Retail and BGF, while Vice Chairman Hong Jung-kook and President Hong Jeong-hyuk took 23.8 billion won and 1.26 billion won each from BGF.

The union started accepting membership applications on April 19 through social messenger services. Hundreds of workers have reportedly joined the union so far. BGF Retail had 3,303 employees as of the end of last year.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]