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Wednesday, July 19, 2017

Food workers challenge Amazon buy out of Whole Foods

Cites job loss, anti-competitiveness and further destruction of local markets
From the United Food and Commercial Workers

Image result for Amazon & Whole FoodsOn July 17, UFCW International President Marc Perrone sent a letter to the Federal Trade Commission (FTC) calling for a thorough investigation of Amazon’s proposed acquisition of Whole Foods.

Following Amazon’s announcement that it was acquiring Whole Foods, Perrone wrote in a CNN op-ed that “the hard-working men and women who work at Whole Foods now face an uncertain future” due to the Amazon model for grocery stores. His letter to the FTC expands on that theme, saying, in part:

“Amazon’s acquisition of Whole Foods is not about improving customer service, products or choice. It is about destroying Whole Foods jobs through Amazon-style automation. We strongly urge the FTC to carefully review this merger. We believe a fair and impartial analysis will prove that Amazon’s acquisition of Whole Foods is a competitive threat to our economy that will hurt workers and communities.” 

The full text of Perrone’s letter reads:


Dear Commissioners:


Because of the impact of online shopping, technology, and automation, our economy and the retail grocery landscape is changing dramatically. As such, the very definition of how mergers, such as the proposed Amazon and Whole Foods merger, would impact grocery competition, customer choice, the price of goods, and, especially hard-working retail workers must be rethought. While traditional analysis may discount the threats that would arise from Amazon’s acquisition of Whole Foods, Amazon is not a traditional retailer or grocer.


By any and every reasonable measure, Amazon is an online retail monopoly. The scope and weight of Amazon’s digital reach poses a severe and constant economic threat to consumers, retailers and especially grocers, irrespective of whether they’re located online or are traditional brick-and-mortar stores. 

More significantly, the scope of Amazon’s reach and the very nature of our economy today, does not limit their impact to the digital retail landscape. The fact is that Amazon is more than a digital retail monopoly; rather, it is a retail monopoly that threatens every corner of our nation’s economy.


We urge you to consider, for example, the facts of Amazon’s growing unfair scope and reach:


·         According to a 2016 report from the Institute for Local Self-Reliance, half of all online shopping searches start directly on Amazon.


·         That same report states that within five years, 20 percent of the U.S.’s $3.6 trillion retail market will have shifted online, and Amazon is on track to capture two-thirds of that share.


·         Additionally, a report from Consumer Intelligence Research Partners (CIRP) last week estimated total U.S. Prime membership at 85 million, which is up 35 percent from the year-ago quarter and double from two years ago. CIRP also noted that 63 percent of U.S.-based Amazon customers are Prime members.

In terms of impact, Amazon arguably poses a greater threat to our retail economy than any other online or traditional brick and mortar grocer. Again, we urge each commissioner to consider the following impacts:

·         Hurts Consumers: Amazon’s proposed merger of Whole Foods will hurt consumers by allowing their national economic power to gain unfair advantage with suppliers. As a result, not only may consumer prices increase, the quality and scope of products may be impacted. While Whole Foods may have 460 stores worldwide, the reality is that the very nature of Amazon’s size allows them to unfairly compete against small and medium-sized grocers when it comes to the purchase of goods.


·         Hurts Choice: Amazon’s reach will ultimately reduce the number of grocery competitors that consumers can choose from. Regardless of whether Amazon has an actual Whole Foods grocery store near a competitor, their online model and size allows them to unfairly compete with every single grocery store in the nation.


·         Hurts Hard-Working Men and Women: The FTC is a public agency, and it must consider the impact that any merger will have on consumers and workers. Amazon’s online business model is built on a brutal foundation of automation to cut costs. If this merger proceeds, it could impact thousands of Whole Foods workers’ jobs simply for the sake of enriching one of the nation’s wealthiest individuals – Jeff Bezos.


·         Job Destroying Automation: Amazon has made its competitive vision clear with the introduction of its Amazon Go format, which eliminates nearly every grocery worker in its stores, and replaces them with automation and automated check stands.  Amazon’s acquisition of Whole Foods is not about improving customer service, products or choice. It is about destroying Whole Foods jobs through Amazon-style automation.

We strongly urge the FTC to carefully review this merger. We believe a fair and impartial analysis will prove that Amazon’s acquisition of Whole Foods is a competitive threat to our economy that will hurt workers and communities.

Sincerely,

Marc Perrone