French retailer Carrefour is reviewing the labor practices of its Saudi franchise partner, MAF, after Amnesty International raised concerns about underpaid and overworked employees, particularly migrant workers. These allegations have prompted internal investigations to ensure compliance with human rights standards.
Carrefour and Majid Al Futtaim (MAF) represent a significant presence in Saudi Arabia’s retail sector, with recent developments highlighting both expansion and challenges:
Expansion in Saudi Arabia
- MAF, as Carrefour’s franchise partner, has been actively expanding its presence in Saudi Arabia:
- In August 2023, MAF opened its first Carrefour store in Al Kharj, spanning 5000 square meters and offering over 20,000 products.
- In October 2023, MAF launched its first Carrefour store in Ha’il City, bringing the total number of stores in Saudi Arabia to 24.
Employment and Localization Efforts
- The company has been focusing on employing Saudi nationals:
- The Al Kharj store aimed to employ 80 individuals, with 40% being Saudi nationals
- The Ha’il store planned to employ more than 70 colleagues, with 40% being Saudi citizens
- In 2019, MAF announced plans to introduce a Saudi-only workforce in Carrefour supermarkets across the countryRecent Controversies
However, recent reports have raised concerns about labor practices:
- In October 2024, Amnesty International released a report accusing MAF of underpaying workers and imposing excessive hours, particularly on migrant employees in Saudi Arabian stores
- The report described living conditions arranged by labor supply firms as “filthy and overcrowded,” with up to eight individuals sharing a single roomResponse to Allegations
- Carrefour has initiated a review of employment practices at MAF in Saudi Arabia:
- The company requested MAF to conduct internal investigations among its employees and subcontractors
- An independent expert has been brought on board to conduct a comprehensive investigation into human rights standardsStrategic Importance
- MAF’s partnership with Carrefour is significant for the Saudi retail sector:
- MAF operates over 465 Carrefour stores across 13 countries, serving more than 770,000 customers daily
- The company has invested in online delivery infrastructure, including a $30 million funding round for Wadi Grocery in Saudi ArabiaThe case of Carrefour and MAF in Saudi Arabia illustrates the complexities of managing a large retail operation in the Kingdom, balancing expansion and localization efforts with the need to ensure fair labor practices and compliance with international standards.
