It’s a big game of Monopoly played by only one person.
Last week, Amazon shocked not only the business world but also Americans in general when it announced the acquisition of Whole Foods Market for $13.7 billion. The purchase puts Amazon in a position to compete with online grocers such as FreshDirect, Peapod and Wal-Mart.
Retail, Wholesale and Department Store Union President Stuart Appelbaum said that Amazon’s latest activity pits them against Wal-Mart in a battle to destroy labor rights.
“The latest move by Amazon to establish itself as the dominant retailer—both online as well as in the physical world of brick and mortar retail—shows the lengths it will go to destroy competition at any cost in its longstanding battle with Wal-Mart to become the nation’s largest retailer,” said Appelbaum in an emailed statement. “This disruptive and destructive battle between two of the nation’s leading low-road employers like Amazon and Wal-Mart can only mean bad news for workers, and ultimately consumers, who in the future will almost certainly be faced with fewer options and no real competition in the retail and grocery industries.”
The ripple effect of Amazon’s purchase of Whole Foods could be felt not too long after the news. Both Goldman Sachs and Deutsche Bank lowered their ratings for Costco, stating that the competitive advantage they had in the food business is at risk because of Amazon’s latest acquisition.
According to a note written to clients by Deutsche Bank Analyst Paul Trussell, and obtained by CNBC, the Whole Foods Market acquisition “represents a game-changer with Costco’s competitive moat in grocery under greater threat while its digital platform lags peers, putting membership renewal at risk for decline. The pipeline of positive catalysts has played out and the competitive backdrop is intensifying with Amazon & Wal-Mart accelerating in-store and online efforts and innovation.”
What shareholders love, and workers dislike, about Amazon is their ability to cut costs of operation. Those costs have historically been at the expense of employer salaries and benefits. During the past decade, there were several published stories about not only the workers’ conditions in Amazon warehouses around the globe, but the alleged “bruising” atmosphere of its white-collar executive culture as well.
In his statement, Appelbaum said that Amazon’s purchase will have a negative effect on labor.
“This will only accelerate the trend of low-wage employers like Amazon increasing their market share and profits by destroying good jobs (and their competition) in a race to the bottom that will leave workers with fewer jobs and lower wages while leaving consumers with fewer options and less choice in where to shop,” stated Appelbaum. “This may be a sweet deal for Jeff Bezos and Amazon investors, but it’s truly a rotten deal for American workers and consumers.”