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March 19, 2019
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In News

Union leader predicts strike at Stop & Shop

The leader of at least one union local involved in a months-long contract dispute with Stop & Shop believes workers will likely have to walk off the job to secure fair pay and benefits from the Massachusetts-based supermarket chain.

“It looks as though this year, you’re probably going to get the opportunity to go out and fight them,” said Jeff Bollen, president of the United Food and Commercial Workers Union Local 1445, in a video message to members released late last week.

Bollen, who has taken a hard line in negotiations and helped push the Dedham, Massachusetts, union branch toward a strike authorization vote last month, said he doesn’t foresee an acceptable labor pact in the near future and reiterated claims that Stop & Shop wants to substantially increase employees’ out-of-pocket health care payments.

“I just don’t think they’re going to have enough on the table when we get to the end of the road in a few weeks,” he said. “I really believe that they’re going to try to still demand some kind of give-backs and concessions, and with that we will be going out.”

UFCW Local 1445 was the first of five union locals involved in the ongoing talks to vote to sanction a strike. The other four chapters, representing Stop & Shop workers throughout Connecticut, Massachusetts, and Rhode Island, have since followed that lead, and while no employees have walked off the job yet, labor leaders can now call for a work stoppage at any time.

Contract discussions between Stop & Shop, a subsidiary of Dutch retailer Ahold Delhaize, and representatives of its more than 31,000 New England employees started in mid-January. A prior work agreement, in place since 2016, lapsed on Feb. 23 after the two sides were unable to find common ground on a number of issues, including time-and-a-half pay for all employees who clock in on Sundays.

UFCW officials originally held out the possibility of a strike as an absolute last resort, citing the personal cost to the families of employees who depend on a Stop & Shop paycheck. In the last two weeks, however, the union’s stance has become more openly confrontational, and pro-strike messages now flood the union locals’ social media pages.

On March 5, a Facebook account operated by UFCW Local 371 in Westport uploaded a video showing an industrial printer churning out protest signs. Another post, this time by UFCW Local 919 in Farmington, showed a union official presenting a pen and clipboard to “Marty,” the mobile robot now deployed in many Ahold Delhaize supermarkets to detect spills and scan inventory.

“Hey Marty! Sign here to join the Union,” the picture’s caption reads, an apparent jab at the parent company’s move toward automation.

Despite the building momentum in favor of a strike, Bollen acknowledged that Stop & Shop had recently given ground on some important issues, including health care costs, and asked workers for more time.

“The most important thing for you is you’ve got to stay patient,” he told members. “We know you’re antsy, we know that you’re getting restless. Remember, the weather’s getting better. We still have to play this through. We’re still bargaining in good faith. The company is starting to show some progress.”

Stop & Shop said it supports its unionized workforce and wants to reach a fair compromise with employees that preserves their longstanding benefits. But the supermarket chain has also warned that any deal must recognize changes in the industry and the expanding role of automated technology, such as robots and self-checkout machines, that boost the company’s competitive advantage.

Source: JournalInquirer.com

March 18, 2019
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In News

Workers And King Soopers Both Want To Return To Negotiations, Avoid Strike

Company negotiators for King Soopers, City Market and their workers are hoping to return to the table to stave off a potential strike.

UFCW Local 7 members authorized a strike last week with  more than 92 percent voting to authorize a work stoppage. Both parties say they have sent letters asking the other to return to bargaining.

Kroger, which operates King Soopers and City Market, has the largest share of grocery sales in the state, according to union President Kim Cordova. But the company offers lower wages and less valuable benefits than its competitors that are not as successful, she said

Kroger operates about 150 stores in Colorado. Last year, Kroger was ranked 17th on the Forbes 500 list, and had more than $122 billion in revenue. The union argues the company’s profits aren’t being shared with workers.

Representatives for King Soopers and City Market are ready to negotiate this week, according to corporate spokesperson Adam Williamson. But Cordova says she isn’t hopeful about a compromise.

Cordova said the union is trying to set up the next negotiation session for the weekend of March 23.

“Based on the way negotiations have been going, I don’t feel real confident that the company wants to come to an agreement,” she said.

Company negotiators have walked out of previous negotiations, union officials said. Employees’ current contract expired on January 12, 2019. The two sides have been discussing new worker contracts since late 2018.

Cordova said if the company walks out again or refuses to negotiate “in good faith,” she will likely support a strike. If that happens, those who cross the picket line to work could be fined by the union, Cordova said. That will be decided on a case-by-case basis, she added.

The current proposal includes around a $14 per week raise for half of full-time workers and $7 extra a week for part-timers. It guarantees employees can get sick leave pay on the first day they are ill, but only after ten years.

That’s a big hangup for the union, Cordova said.

“There are over 12,000 workers that set the table for [people],” she said. “They want to be healthy when they are serving their customers.”

The union says employee benefits are pared down in the contract: that their health care coverage will cost them more and that there aren’t raises or equal health coverage access for courtesy clerks, who the union says are disproportionately disabled.

The company says its offer is fair, and that employee health benefits are “best in class.”

Source: CPR.org

March 18, 2019
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In News

Rite Aid slashes 400 corporate jobs

  • Rite Aid on Tuesday announced it’s cutting about 400 full-time positions, or more than 20% of the corporate positions at its “headquarters and across the field organization,” according to a company press release.
  • The drugstore retailer also announced several changes in top management, starting with John Standley stepping down as chief executive officer. The board is searching for a new CEO, and he will remain in the position until a successor is appointed.
  • Other executives are exiting immediately or after a brief transition, the company said. Bryan Everett, chief operating officer of Rite Aid Stores, has been promoted to chief operating officer, succeeding Kermit Crawford, who is leaving. Matt Schroeder, chief accounting officer and treasurer, has been promoted to CFO, replacing Darren Karst, who is leaving the this spring. Brian Hoover, group vice president and controller, has been promoted to chief accounting officer. Jocelyn Konrad, executive vice president of pharmacy, has been promoted to executive vice president of pharmacy and retail operations, replacing Derek Griffith, executive vice president of store operations, who is leaving.

This monumental shake-up, which is anticipated to be complete by the end of fiscal 2020, will save the company some $55 million each year, Rite Aid said on Tuesday. About $42 million will be realized within fiscal year 2020, as two-thirds of the reductions are effective immediately.

The moves are drastic (and will entail a one-time restructuring charge of about $38 million, the company said) and reflect Rite Aid’s smaller footprint after it sold stores to Walgreens and closed others. The resulting savings will help “offset an expected reduction in income associated with its diminishing obligations under the Transition Services Agreement with Walgreen Co.,” related to Rite Aid’s sale of some 2,000 stores to its rival after the two failed to merge in 2017.

But, according to Moody’s Investors Service, they were also imperative. Rite Aid’s announcement “…was necessary to align the company’s cost structure to the smaller size of the company and to offset the rolling off of the company’s Transition Services Agreement with Walgreens,” Moody’s Vice President Mickey Chadha wrote in comments emailed to Retail Dive.

The $55 million each year “is not a panacea of all that ails Rite Aid but it is a positive in light of the intense competitive pressures the company faces from much larger and well capitalized competitors like CVS and Walgreens in the changing pharmacy landscape as scale become increasingly important within the pharmacy sector,” he also said.

Rite Aid has floundered as Walgreens and CVS have moved assertively into the medical side of health care services and performed better at the front of the store as well. Despite the drugstore sector lagging behind beauty specialty retailers in terms of innovation and customer experience, those rivals have also captured much of that market, according to Edge by Ascential’s new Health, Beauty and Personal Care report. Walgreens and CVS contributed 64% of the top 10 specialists’ health and beauty sales in 2018 and “are also driving innovation in the health & beauty sector through introducing more in-store digital solutions and services,” according to that report, which was emailed to Retail Dive.

Source: Retail Dive

March 18, 2019
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In News

Kroger ends its unmanned-vehicle grocery delivery pilot program in Arizona

Supermarket giant Kroger said it soon will end a pilot program in which more than 2,000 grocery deliveries were made in self-driving vehicles from a store in Scottsdale, Arizona.

The program, launched last August, featured deliveries in autonomous vehicles from robotics company Nuro from the Kroger-owned Fry’s store at 7770 E. McDowell Road for customers in ZIP code 85257.

The companies described it as the nation’s first program featuring deliveries to the general public from fully unmanned vehicles.

Wednesday will mark the final day of deliveries. After that, customers who participated in the Scottsdale pilot will switch over to an existing grocery-delivery service provided by Kroger in partnership with another company, instacart.

The instacart service doesn’t feature self-driving vehicles. Another difference is that instacart’s staff, rather than Fry’s associates, will select and deliver groceries.

But Scottsdale customers who received groceries during the Nuro pilot will continue to pay the same $5.95 delivery fee for a full year.

The purpose of the venture with Nuro was to test deliveries in self-driving vehicles in  Scottsdale, then expand the program to a larger metropolitan area. The program started with modified Toyota Prius models, then added Nuro’s own custom vehicle called the R1.

The companies now will start the next phase of the program — an autonomous-vehicle delivery service at two Kroger stores in Houston that will reach customers in four ZIP codes there.

As in Scottsdale, Kroger and Nuro will begin the service with Nuro’s self-driving Toyota Prius fleet, then introduce a new generation of driverless vehicles later this year.

Nuro will continue to have a presence in Arizona, at a Scottsdale office, focusing on software testing, mapping and training with a staff of more than 50 employees and contractors, said Emma Esrock, a Nuro spokeswoman.

Source: USA Today

March 15, 2019
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In News

What We Know About The Impending King Soopers, City Market Worker Strike

Employees of Colorado King Soopers and City Market stores begin voting today on their first strike authorization since 1996.

That means around 12,000 unionized butchers, cashiers and shelf-stockers might soon walk off the job.

An authorization vote doesn’t mean a strike would start right away. The vote gives workers leverage in ongoing negotiations with the grocery chain, said Evan Yeats, spokesman for the United Food and Commercial Workers Local 7.

“Striking is a tough decision for everybody and we hope it doesn’t come to that,” Yeats said. “The vote just gives the bargaining committee the ability to call the strike when they need to.”

The union, which represents about half of all King Soopers and City Market employees in Colorado, is pushing for raises, increased health care benefits and the creation of more full-time jobs.

Negotiations between representatives of the two sides have dragged on since mid-December.

But in a statement issued late last week, UCFW Local 7 said talks ended abruptly on March 8 when King Soopers and City Market representatives “walked out of the room and didn’t return.”

“King Soopers and City Market said they didn’t want to negotiate further and left in the middle of scheduled bargaining,” the union said in their statement. “This is part of a continuing pattern of King Soopers and City Market ignoring federal law by not bargaining in good faith and attempting to intimidate UFCW members.”

In a separate statement, Dennis Gibson, president of King Soopers and City Market, encouraged employees voting on Thursday and Friday to consider the company’s current offer, which Gibson says includes some wage increases, job openings and retirement benefits.

“Despite the transformation occurring in the grocery industry, we continue to make significant investments in our associates,” Gibson said. “We have come to this offer with each of our associates in mind. I am confident when our associates read through the details of this offer they will see we are making significant investments in them.”

In preparation for the the potential strike, the company has started hiring temporary workers.

A sign posted at a King Soopers in Fort Collins advertised positions for the meat and deli departments as well as the in-store Starbucks kiosk.

A sign inside a King Soopers store in Fort Collins seeking temporary workers.
CREDIT JACKIE HAI / KUNC

“Once negotiations stopped we made preparations to ensure our stores can continue to serve our communities,” the company said.

King Soopers operates 159 stores in Colorado and is headquartered in Denver. Grocery-giant Kroger bought the chain in 1983.

Members of UCFW Local 7 will cast their votes in a series of meetings taking place Thursday and Friday in Denver.

Doug Irwin, a meat cutter at King Soopers in Greeley, has worked for King Soopers for more than two decades and makes $20.40 an hour. He said he plans to vote to authorize a strike because he isn’t happy with the opportunities for raises.

“We call them the ‘Kroger quarter’ because they’re always 25 cents,” he said. “That’s what they’ve been ever since I’ve been in the company.”

Irwin said he works another part-time job moving furniture to pay for his family’s expenses.

“It’s a struggle,” he said. “We have four kids. My son had foot surgery a few years ago and that was a tough one.”

Irwin said the decision to vote for a strike isn’t an easy one.

“I think everybody struggles with that,” he said. “Not only for us right now but for the next people that come in to work — it’s what we’re also looking at.”

Source: KUNC.org

March 13, 2019
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In News

Cannabis call centre workers vote to unionize

Ontario Cannabis Store call centre workers have voted unanimously to unionize in a drive that put fair hours, scheduling and job security at centre stage, according to the United Food and Commercial Workers union.

Around 20 Toronto-based employees of Line One Contact Centres, which provides call centre services to the OCS, voted Tuesday to join UFCW — although organizer Kevin Shimmin said the employer is challenging seven ballots cast by workers hired through a temp agency.

Shimmin said the union is insisting that temp agency workers be extended the same protections as directly hired ones.

“The fight that might be coming up soon is just to make sure that everyone is treated equally,” he told the Star.

The call centre drive is part of a broader movement to unionize the cannabis sector, which has been plagued by complaints of precarious work; the Ontario Public Service Employees Union is also currently seeking to organize up to 200 warehouse workers at an OCS warehouse operated by contractor Domain Logistics.

At the Toronto call centre, the battle has sometimes been fraught: UFCW recently filed an unfair labour practice complaint against Line One for terminating an employee leading the union drive, according to documents seen by the Star.

The documents filed to the Ontario Labour Relations Board say the call centre worker Adam Jasar began discussing forming a union with his colleagues and supervisors in early February. He subsequently contacted UFCW, who met with workers later that month.

On Feb. 28, Jasar was told by his employer that he was being fired for telling an HR representative she would have a “tough time” negotiating contracts with employees, the labour board application says.

“Given the contextual facts and circumstances, there can be absolutely no doubt that Mr. Jasar was terminated as a reprisal for his union organizing activity, and that such termination was designed to intimidate other employees from exercising their right to join a union and to undermine the Union’s ongoing organizing activity,” the complaint reads.

In a statement to the star, Line One president Kyle Ostermann said the issue of “Whether the UFCW has been successful in its attempts to unionize Line One call centre workers is an issue presently before the Ontario Labour Relations Board, and has yet to be finally determined.”

He said the company had just received notice of the unfair labour practice complaint and intended to “vigorously defend” itself.

“The allegations contained in the complaint are entirely without merit,” he said.

In an emailed a statement, a spokesperson for the Ontario Cannabis Store said it was not its “place to comment on this as the call centre is not operated by OCS and this is a matter between the employer and its employees.”

Shimmin said the union’s priorities would be to obtain fair scheduling provisions and minimum hour guarantees, since workers at the call centre experience major shift fluctuations.

“You often don’t know one week to the next how many hours you’re going to get and even if you’re going to get any hours at all,” he said.

UFCW already represents thousands of workers in the cannabis sector in Quebec and the United States. The union is also leading a legal challenge against a labour law exclusion that prevents agricultural workers in Ontario from unionizing.

Source: The Star

March 11, 2019
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In News

Why Amazon’s New Grocery Ambitions Could Be a Mistake

Amazon.com has been angling for a piece of the $660 billion grocery industry for more than a decade.

In 2007, the company launched Amazon Fresh, an e-commerce grocery delivery service, in its hometown of Seattle. But Fresh’s slow growth only gave it a sliver of the massive supermarket industry, so Amazon acquired Whole Foods Market for $13.7 billion in 2017, immediately making it a major player in the industry.

Now, according to The Wall Street Journal, Amazon’s ambitions in the industry extend beyond Whole Foods as the e-commerce giant is planning to open its own supermarkets, targeting lower prices and products, like Coca-Cola, that can’t be sold at Whole Foods.

An Amazon Locker in a Whole Foods store

Amazon stock rose 2% that day while supermarket stocks such as Kroger briefly tumbled, in a move reminiscent of the sector’s plunge when Amazon said it would acquire Whole Foods.

While it’s clear that the e-commerce giant, with its reputation for aggressive pricing and history of favoring market share gains over profits, poses a threat to its new supermarket rivals, it’s less evident why Amazon is so focused on the industry. After all, supermarkets are a slow-growth, low-margin industry. Amazon, on the other hand is primarily seen a tech giant, and it’s valued as such, with a P/E ratio of 84.

The market takes for granted that Amazon wants to sell all things to all consumers, but it may not be in investors’ best interest for the company to launch its own grocery business or pursue a significant share in the industry to begin with. Such a move deserves a closer examination.

Mixed results from Whole Foods

Amazon’s acquisition of Whole Foods was seen as a declaration of war on the supermarket industry, so it wasn’t surprising to see stocks plunge, some by double digits, on the news. However, 18 months after Amazon took over the natural-grocery chain, its results have been mixed, and it hasn’t decimated its rivals the way some expected back then.

Though the company has made some changes, including offering benefits to Prime members including delivery, and selling gadgets like Echo devices, Whole Foods is largely the same, and it doesn’t seem to have gained significant market share. Amazon doesn’t break out Whole Foods results, but it does provide sales for physical stores, which are made up almost entirely of Whole Foods locations but also include a handful of Amazon Books stores, four-star stores, and Amazon Go locations.

Though sales at Amazon’s physical stores fell 3% in the fourth quarter, CFO Brian Olsavsky said on the recent earnings call that adjusting for a calendar shift and for orders that have moved from in-store to online, “apples-to-apples” growth was up about 6%.  Six percent growth from Whole Foods is solid, but for a company used to posting quarterly revenue growth of 20%, 30%, or even 40%, it’s hardly what investors are used to.

Meanwhile, something else unexpected happened. Amazon’s new competition didn’t stand still; it responded aggressively. Walmart, the nation’s leading grocer, has rapidly expanded its grocery pickup and delivery programs and says it’s gained market share in groceries. In its fourth quarter, its comparable sales rose 4.2%, and it’s surpassed Amazon as the leading online grocer.  Kroger has also expanded a similar program, called ClickList, and even Costco launched an e-commerce delivery program, partnering with Instacart to offer same-day delivery of perishables.

Supermarkets aren’t scalable

Part of what makes tech stocks so appealing is their scalability. An e-commerce business, for instance, can easily ramp up sales, as it’s exposed to customers around the country, or even the world. Physical stores, on the other hand, can only reach customers within a certain geographic radius. The total addressable market for an individual store is much smaller than for a website.

The supermarket industry suffers from this lack of scalability. Building a national supermarket business requires finding real estate, negotiating contracts, building it out, and hiring hundreds of staff members, which takes time, effort, and money. Therefore, unseating a national grocer like Walmart or Kroger from their leadership position is not going to be easy.

The Wall Street Journal said Amazon was considering acquiring regional supermarket chains to jump-start growth of its homegrown chain, but doing so too aggressively could catch the eye of antitrust regulators, and even if it takes the acquisition approach, national chains dominate the market in much of the country.

Even in the e-commerce era, groceries have been one of the few segments that have been relatively protected from online disruption. Even as more companies move toward delivery, it’s become clear that these businesses need an actual store to serve as a base for deliveries and pickups. Just having warehouses, as Amazon Fresh does, isn’t enough.

Therefore, it seems Amazon may be at a competitive disadvantage in supermarkets, since its only assets appear to be its customer reputation and its ability to entice customers through benefits in its Prime loyalty program. However, even if the value proposition pays off for customers, the potential return on investment is still likely to be slim.

One caveat

The one thing that could change the equation here is the “Just Walk Out” technology behind its cashierless Amazon Go stores. Through a network of cameras and sensors, the technology automatically charges customers for what they take off shelves.

According to The Wall Street Journal, Amazon has been testing the technology to use in larger stores, though if it were able to do so, it would make the most sense to apply it to Whole Foods locations as that chain is already built on a premium experience and customers are more likely to be time-sensitive.

Amazon is one of the most inventive companies in the modern world, and it has the potential to disrupt the supermarket industry with “Just Walk Out” technology or something similar. However, if the company was currently capable of doing that, we would probably have seen evidence of it in its Whole Foods stores.

Without such a breakthrough innovation, Amazon’s push further into groceries, an industry with slim profits, little growth, and no scalability, looks like a mistake.

Unseating Walmart or Kroger from their grocery leadership is not going to be easy, as the two companies have nationwide footprints.

March 11, 2019
admin
In News

Five Stop & Shop unions in southern New England authorize leaders to call strike

More than 31,000 Stop & Shop workers in southern New England have authorized their labor leaders to call for a strike as the sides prepare to resume talks for new contracts later this week, according to United Food & Commercial Workers International.

The Stop & Shop workers — represented by five separate UFCW unions — have remained at work since their contracts with the grocery store chain expired Feb. 23.

“No one has called for a strike just yet, but moving forward, the UFCW negotiation team can call for one at any time,” said Amy Ritter, a UFCW spokeswoman.

In separate votes Sunday afternoon, United Food & Commercial Workers Local 328 and Local 919 approved strike authorizations.

They joined three fellow UFCW unions, locals 1445, 371, and 1459, each of which previously had approved strike authorizations, Ritter said. The unions represent members in Massachusetts, Rhode Island, and Connecticut.

Each UFCW union has its own contract with Stop & Shop, but are “unified at the table,” Ritter said.

Negotiations have been ongoing since the contracts expired, the sides said.

Richard Wright, a member of Local 328’s negotiating committee, said his union’s message to the company is: “We made you what you are, the number one leader in food sales in the Northeast. You should treat us fairly.”

Wright, who has worked for 10 years as a meat cutter at Stop & Shop’s store in Orleans, said contract negotiations have focused on wages, pensions, and health insurance. The company’s proposed contract to workers is a “slap in the face,” he said.

In an e-mail to the Globe, Stop & Shop spokeswoman Stefanie Shuman said the company is continuing to negotiate in good faith for a new contract.

“We are working hard to reach strong new contracts that will continue to provide highly competitive wages, comprehensive health care coverage and, unlike any other area food retailers, a defined benefit pension,” Shuman said on Sunday.

The company has previously said that most of its competitors, including Market Basket, Wegman’s, Trader Joe’s, Whole Foods, and Walmart, are “all non-union with much lower labor costs.”

The company has committed up to $2 billion to upgrade its stores over the next several years, Shuman said.

“We are proud of our relationship with associates and optimistic that we will be able to reach new agreements,” Shuman said.

The sides are are scheduled to resume talks on Wednesday and Thursday, according to Shuman and Wright.

Source: Boston Globe

March 8, 2019
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In News

Groceries, union hold first meetings for new labor contract

Southern California’s three major supermarket chains and the union that represents store workers held their first meetings this week to discuss a new contract for some 60,000 employees.

None of the key financial issues for workers at Ralphs, Vons and Albertsons were discussed at the meetings Tuesday and Wednesday, union sources said. The two sides will meet next on March 21 and 22.

The three-year contract that has covered members of the United Food and Commercial Workers union expired Sunday, March 3. Employees continue to work under the terms of the expired contract.

Joe Duffle, president of Local 1167 of UFCW, one of seven local unions covered by the contract, said typically the first round of talks include preliminary exchanges of proposals but not detailed negotiations covering key issues such as wages, benefits and pensions.

“I’m hopeful we can continue to sit down and have a dialogue,” said Duffle, whose union represents workers in the Inland Empire. “I’m confident that we can do that, and that we won’t be dragged through the muck like we’ve been for the last 15 years.”

A bitter dispute between the two sides in 2003 and 2004 led to a costly lockout and strike that lasted 141 days and was one of the most contentious labor disputes in recent Southern California history. Prolonged contract talks in 2011 almost led to a second strike.

In the last four negotiation cycles, the talks carried on well past the existing contract’s expiration.

Representatives of the three chains did not respond to requests for comment.

Duffle pointed out that unions generally try to keep their wages above the minimum wage, which in California will jump to $15 an hour Jan. 1, 2022.  Along with wages and benefits, the union’s issues include training, simplified work classifications and flexibility in scheduling.

Technology is also an issue that will be on the table, Duffle said. Recently the CEO of Kroger, Ralphs’ parent company, has said his firm will invest in new developments to enhance its business. Kroger reportedly is already doing $5 billion a year in e-commerce sales.

“We have to figure out how to incorporate this into the current environment and help employees be a part of it, not be replaced by it,” Duffle said. “There is a place for our members in making technology work.”

Union leaders started the negotiations with frustration on two fronts: the first talks didn’t happen until after the contract expired and there would be only four days of talks in March.

“It’s the beginning,” Mike Shimpock, spokesperson for Local 770, which covers Los Angeles County and the Central Coast. “Unfortunately we’re starting this later than we would have liked because the companies are dragging their feet. They’re slow-working it.

“We just want a fair deal, no games,” he added.

Several other chains, including Stater Bros. and Gelson’s, have UFCW contracts that are almost identical to the deals Vons, Albertsons and Ralphs have. Those chains have formally extended the current contracts.

During recent negotiation cycles, San Bernardino-based Stater Bros. has not engaged in talks with UFCW but has waited until the union reached a deal with the other chains, then signed a contract that was virtually identical.

Source: The Press-Enterprise

March 6, 2019
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In News

Amazon plans to open dozens of grocery stores in U.S. cities

Amazon.com Inc. plans to open dozens of grocery stores in U.S. cities, The Wall Street Journal reported, a move that would expand the retail and technology giant’s grocery footprint beyond its Whole Foods Market chain.

The first of these stores will open in Los Angeles as early as the end of 2019, and Amazon is in talks to open locations in shopping centers in San Francisco, Seattle, Chicago, Washington D.C. and Philadelphia, the Journal reported, citing people familiar with the matter. The company is also exploring the idea of purchasing regional grocery stores, the paper said.

The Seattle-based company, which has been experimenting with online delivery of groceries for more than a decade, got into brick-and-mortar food retail with its 2017 purchase of Whole Foods. Amazon has also expanded Amazon Go, its cashierless convenience store concept, to 10 stores. People familiar with the matter said last year that the company planned to open as many as 3,000 of the so-far small-format stores, including up to 50 in 2019.

Amazon declined to comment on the Journal report.

Shares of food retailers all fell on the news. Kroger Co., the nation’s biggest traditional grocery chain, dropped as much as 6.4 percent, while Walmart Inc. and Costco Wholesale Corp. also declined. Target Corp., which gets about 25 percent of its sales from food, also fell before recouping its losses.

Amazon’s $13.7 billion purchase of Whole Foods signaled the company’s intent to break into the $840 billion grocery market, but left it at a scale well below the likes of market leader Walmart Inc., which operates 4,750 grocery stores.

Some analysts saw Whole Foods, which stocks a limited selection of items in contrast to Amazon’s preference for selling a wider range of items, as a starting point for Amazon in physical grocery retail. The company has since started delivering groceries from the shelves of Whole Foods locations across the U.S.

Source: AdAge