Not many should be surprised that Amazon prevailed in its effort to maintain non-union status at its large fulfillment center in Bessemer, AL. The overwhelming 71 percent vote to not organize shouldn’t even be that startling. And whether you believe the Retail, Warehouse and Department Store Union (RWDSU) leadership that Amazon manipulated or implicitly bullied their associates to vote non-union is an accurate depiction of the whole circus leading up to the vote tally (which began on February 8), the dominance of the vote should speak primarily for itself. At more that $15 an hour to start, Amazon associates in Bessemer hold a huge financial advantage over most of their working peers in the community. And when you add in health care coverage without an eligibility requirement, the compensation advantages gave Amazon even more clearance when viewed against the local job market in suburban Birmingham. But I don’t want to paint Amazon’s behavior as resembling a group of choir boys either. The pressure on associates to meet the accelerating demands of Amazon’s business (especially true during the peak of the pandemic) where employees claimed they had to pick about 300 items per hour which sometimes deprived them of bathroom breaks needs to be modified and improved. And then there’s the bigger labor vs. management argument, which remains a seemingly never-ending tug of war. Since I’m a big believer in the Bill Parcells “scorecard” theory of success – “You are what your record says you are” – the fact of the matter is that attempts to newly organize entities, particularly in retail and distribution, has been dismal. If you micro-view just the grocery sector in the Mid-Atlantic and Northeast, you’ll find that retailers that entered the market or expanded their store bases in that timeline – such as Walmart, Food Lion, Wegmans, Trader Joe’s, Aldi and Target – not only remain non-union, but their initial entries were also essentially unchallenged when they arrived.
While I don’t expect the RWDSU will be successful in their challenge to overturn or gain a re-vote in Bessemer, I do believe that they, along with the Teamsters and UFCW, will be active in aggressively attempting to organize other Amazon distribution centers.
And the perception that Amazon’s explosive growth means the Seattle-based juggernaut is an unchecked semi-monopolistic monolith or just another corporate bully hurts them in the court of public opinion and potentially in Washington, DC, where legislators on both sides of the aisle have sought more disclosure and greater oversight from companies like Amazon, Facebook and Google.
As one-sided as the Bessemer result was, this is just the opening salvo in what likely will become a group of continuing, lengthy battles.
‘Round The Trade
I guess we can’t get enough Amazon news around here. You might not get this vibe after analyzing the recent Bessemer, AL unionization attempt, but founder and still (until Q3) CEO Jeff Bezos is actually in favor of the Biden-proposed corporate tax rate increase from 21 percent to 27 percent. Fortune reported that Bezos noted “an increase in the U.S. corporate tax rate, as well as the major investments in the country’s infrastructure that the higher taxes would fund” would be beneficial to the country. However, I’m scratching my head to square how Amazon’s effective tax rate in 2020 was only 9.4 percent and for several years prior to that paid no income tax at all. And even more news from “Godzilla”: Amazon has launched a new private-label grocery brand – Aplenty – that is being rolled out online and at its Amazon Fresh grocery stores. Categories included in the brand launch include snacks and condiments with plans to expand the mix to frozen, confections, seasoning and baking mixes later this year. And that’s “Aplenty” of Amazon news for now.
If there’s news from Godzilla, then there’s got to be news from the Bentonville Behemoth, too. Last month, Walmart announced that it has named its first chief creative officer, Jean Batthany, who joins the planet’s largest retailer from Walt Disney where she headed global creative at Disney’s Parks’ experiences and consumer products.
Just before presstime we learned that U.S. online sales rebounded in March to record $9.3 billion in sales, an increase of 16.3 percent from February’s $8 billion mark. The data is from the Brick Meets Click/Mercatus Grocery Shopping Survey which also said that month-to-month delivery and pickup revenue grew 16.4 percent to $7.1 billion. The $9.3 billion mark tied the all-time record originally set in January 2021 and when measured over a full year only grocery sales leaped 43 percent from March 2020’s online sales of $6.5 billion.
Local Notes
Wait! there’s more Amazon stuff to report: this time the focus is on Amazon Fresh which reportedly will be adding another Long Island store to its growing (but not yet unfurled) portfolio of AF units. It appears that the former Fairway market in Plainview will soon become an Amazon Fresh location. According to building permit documents, the store will be about 33,000 square feet in size (reduced from the 55,000 square foot footprint in which Fairway operated). Earlier, we reported that Amazon Fresh plans to open another Nassau County store in Oceanside in a location that formerly housed a Waldbaums unit. Along with two other former metro NY Fairway stores in Woodland Park, NJ and Paramus, NJ, which Amazon acquired at auction 12 months ago, “Godzilla” has plans to open at least 12 Mid-Atlantic units beginning in the next few months.
H Mart, the Korean-American supermarket chain (part of the Hanahreum Group) that operates 72 stores in 16 states, is creating more efficiency at its micro-fulfillment center in Carlstadt, NJ which is targeted to support the privately-held merchant’s e-commerce business. Like most retailers, H Mart’s online business has spiked during the past 13 months. The Lyndhurst, NJ-based ethnic merchant will be utilizing the services of robotics specialist AutoStore (which is also working with The Giant Company’s upcoming large fulfillment depot in Philadelphia). Other vendor partners that are part of the upgrade include Bastian Solutions and WMS Technologies.
A special shout out to three of the most talented executives in the business who recently announced their retirements. Tim Vance, who served as director of market for Kunzler & Co. for the past 11 years, has hung up his meat apron after a wonderful career in the food industry, which also featured stints with Hanover Foods and Charles Chips. Tim, a native of West Virginia (we won’t hold that against him), was one of the few marketing executives I’ve met in my career who keenly understood the symbiotic relationship between marketing and sales. He had the unique skill of effectively blending into group situations and adding his skills set to achieve the best outcome for his company. Besides that, he was hysterically funny, although many of the best moments we shared together can’t be printed in this newspaper. Jim Brennan, a true legend at Coca-Cola, has also stepped down after 32 years with the company, having most recently served as Coke’s executive VP of national sales for the U.S. Jim’s talents lay in his ability to be prepared, candid, passionate and professional. The Philly native was the ideal company ambassador, having called on many of Coke’s key retail accounts at the top-to-top level. In the 48 years of writing about the grocery business and meeting thousands of sales execs, Jim Brennan would rank in my all-time “top three.” Also saying sayonara after a great run in the food biz is Grant McLoughlin, executive VP of the Burns’ Family Fresh Grocer and ShopRite stores in the Delaware Valley. Grant served as the day-to-day leader for the seven-store operation for the past 12 years and oversaw an organization that includes more than 1,500 associates that currently amasses approximately $200 million in annual revenue. Prior to joining Pat Burns’ operation, Grant spent 36 years with Pathmark Stores, rising to the position of senior VP. A true gentleman who mentored many people during his long career, Grant McLoughlin could write a textbook on food retailing. Don’t take it from me, listen to the comments of his two former bosses, Pat Burns and Jim Donald, former CEO of Pathmark and currently co-chairman of Albertsons. Burns: “When Grant joined our organization over 12 years ago, he brought his unique wealth of knowledge, experience, calmness and intellect to us, and every single person in our organization, from myself down, has benefitted. We are eternally grateful for all he has done and for all that he will continue to do for us. Grant has turned out to be one of my best friends.” And Donald: “Grant McLoughlin, quite simply, was one of the best leaders I have worked with. His leadership style was as consistent as I have seen; whether it’s in the board room, working with the vendor community, talking with a disgruntled store associate or handling customer complaints, Grant had a style that was to marvel at. And, quite simply, he got the results he was looking for by being this way. Lots of people say that to be successful, you have to be the loudest and demand the most. Grant was a giver; to his family first, his associates second and he always put himself last. And him being this way, well, his success speaks for itself. Congratulations Grant on an outstanding career!” That’s high but deserving praise from two of the most influential people in food retailing. We wish all three gentlemen the best of luck in their future endeavors.
Finally, a parting thought on Lee Delaney, the young and immensely talented CEO of BJ’s Wholesale Club who passed away last month at the way too young age of 49. Lee was a wonderful person possessed with great intelligence and tremendous humility. While he worked mainly behind the scenes during his 20 years at Bain & Co. (where I first met him), his relatively brief career at BJ’s showed his prowess and leadership skills in guiding the club merchant to unparalleled growth over the past few years including helping BJ’s go public in 2018. Lee Delaney was truly a shining star whose best days should have been ahead of him for many years. May he rest in peace.