Pick n Pay, which employs 36 673 people, said the decision was made in the face of major problems confronting the company in respect of declining profitability and the loss of market share.
Operations director Neal Quirk said that the company had issued the South Africa Commercial, Catering and Allied Workers Union (Saccawu) with a letter in accordance with the Labour Relations Act.
"We have requested confirmation of meeting dates in order for us to consult with Saccawu," he said.
Cosatu said it would back any action that its affiliate Saccawu took to save jobs, and said it believed the move was a response to the threat posed by the takeover of Massmart (MSM) by US giant Wal-Mart.
"We predicted that this would lead to retrenchments in other retail companies, as they struggle to compete with this global giant in the retail sector, and Pick n Pay is proving us to have been right," Cosatu said.
However, analysts believe that Pick n Pay's announcement has very little to do with the Massmart/Wal-Mart deal and more to do with the re-engineering of the group as it tries to curb its "ludicrously high" cost base.
Pick n Pay's annual report puts salaries, wages and other benefits at 4.3 billion rand.
"They've been the best payers in the industry, with the best benefits. So it must have hit really hard for them to do this," Absa Investment analyst Chris Gilmour told I-Net Bridge/BusinessLIVE.
Once the leader of the South African retail pack, Pick n Pay has increasingly come under fire for its industrial action issues and lagged growth and the group has found itself playing catch-up to rivals Shoprite (SHP) and Woolworths (WHL) after a series of errors made by the group over the past few years.
"A lot of what's happening with Pick n Pay is the culmination of a confluence of strategic errors that opened the door for Massmart - entering Australia, not concentrating on general merchandise in their hypermarkets, not putting in centralised distribution timeously and not keeping ahead of the pack with IT," Gilmour added.
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