Tuesday 17 October 2017

Whole Foods' staff in the dark about job security over Amazon takeover

Customers are seen outside a Whole Foods Market in Dallas (Photo/LM Otero, file)
Customers are seen outside a Whole Foods Market in Dallas (Photo/LM Otero, file)

Kalyeena Makortoff

Whole Foods' UK employees have been kept in the dark about job security and wages, despite concerns that Amazon's takeover could result in a major shake-up at the supermarket chain.

The Press Association understands that British workers have not received any official communication about their employee status since the $13.7bn deal was announced last week, leaving Whole Foods' staff to glean information from news reports.

Questions are being raised about how Amazon's ownership may change staff numbers, wages and shelf prices at Whole Foods - including at its nine UK stores - given the online retail giant's interest in using in-store technology to ramp up automation.

Whole Foods did not respond to requests for comment, but an Amazon spokesman said in a statement that the company has "no plans to use no-checkout technology to automate the jobs of cashiers at Whole Foods and no job reductions are planned".

However, employees have been left wondering why Whole Foods has stopped short of issuing an internal statement to counter rumours and soothe concerns.

Alison Porter, a portfolio manager in the global technology team at Janus Henderson Investors, highlighted that Amazon has already been using sensor and cameras to eliminate the check-out at its Amazon Go store in Seattle.

"Innovating in a bricks and mortar store like this could bring powerful efficiency gains. Likewise Kiva robots, a previous acquisition of Amazon, could help with store restocking eventually," Ms Porter said.

"Both of these areas are very nascent for Amazon and Amazon is still working out how to optimise these so these are very much long-term options for the Whole Foods' base."

Read more: Amazon to acquire supermarket chain Whole Foods in $13.7bn all-cash deal

Whole Foods' UK staff are not unionised, which could make it easier to fire them if Amazon nudged the supermarket towards automation in the coming years.

The companies assured last week that all stores will continue to operate under the Whole Foods' brand and that co-founder John Mackey would be kept on as chief executive, while its headquarters would stay in Austin, Texas.

Ms Porter also noted that Amazon's takeover could also bump up investment in Whole Foods, which has suffered six consecutive quarters of declining sales.

"We expected Amazon to be raising capex over the next five years in order to build out the infrastructure for groceries so this acquisition in effect accelerates this, with Whole Foods having already spent $400m per year for the last five years.

"So while it may seem odd that the company that started off as disrupting offline is now buying a bricks and mortar, it fits with the key pillars of Amazon's culture: customer obsession, a long-term focus, invention and aiming for operational excellence."

The deal will still have to pass regulatory and shareholder approval, but is expected to be completed in the second half of 2017.

Press Association

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