Vol. 81/No. 34      September 18, 2017

 

Walmart, Amazon battle for top dog, workers pay
the price

 
Dog-eat-dog competition between retail giants Walmart and Amazon is sharpening and the rest of the retail market is facing a growing crisis, with competitors like Macy’s closing stores across the country and mall owners finding fewer and fewer customers.

This process of continuing monopolization is built on employers who hate unions and fight to keep tight control over workers’ wages and schedules to squeeze out maximum profit, while keeping prices low enough to punish rivals.

These developments unfold against the backdrop of the deepening economic crisis of U.S. and world capitalism.

The two behemoths are each trying to become more like the other to compete against each other better — Amazon buying up Whole Foods and opening brick-and-mortar bookstores while Walmart gobbled up Jet.com to help the bosses push deeper into e-tail.

At the same time, as an article in the March 21 Business Insider titled “The Retail Apocalypse Has Officially Descended on America” reports, “Thousands of mall-based stores are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.” JCPenney is shutting down 138 stores — 14 percent of its locations. Sears is closing 150 Sears and Kmart stores. More than 3,500 store closures are expected in the next couple of months.

One reason for Walmart’s ability to clobber its rivals is its vast reach — it boasts having stores within 10 miles of 90 percent of the U.S. population. Its strong grocery sales generate more than 50 percent of the company’s income.

In the face of this, Kroger Co., the largest grocery-store conglomerate, reports sales have plummeted 35 percent this year, erasing more than $7 billion in value.

Amazon, the leader in e-commerce with 43 percent of all U.S. online retail sales, is trying to go head to head with Walmart. Run by Jeffrey Bezos, who also owns the Washington Post, Amazon is driving to expand its reach, eschewing efforts to make any substantial profit now in search of monopoly profits later. Amazon’s second-quarter profits this year were down 77 percent compared with the previous year.

To compete, Walmart lost nearly a tenth of its $200 billion value on the stock market two years ago after declaring that its investments in e-commerce and higher wages for employees would lower profits over the next few years.

The bosses at both companies are expert at using their market size to force manufacturers to offer steep discounts for the “privilege” of being carried.

And both are pushing for new ways to cut costs and poach into the markets of the other. In 2016 Walmart began a pilot program of paying workers overtime for delivering packages on their way home after their shift.

Bosses at both companies are looking into using drones for deliveries. The Walton clan, the main owners of Walmart, recently took out a patent on building a flotilla of blimp warehouses that would hover at 500 feet over cities and dispatch fleets of drones to get you your order. Amazon took out a similar patent last year, based on a mother ship flying at 45,000 feet.

At the beginning of August, Amazon held a hiring day nationwide for 50,000 full-time warehouse workers, and projects a workforce of 300,000 by the middle of next year. Walmart has 1.2 million U.S. employees in 4,500 stores.

In the face of this onslaught, the only other retail outlets still looking to expand are discount outlets, like Aldi in food and TJX — T.J. Maxx and Marshalls — and Ross Stores for clothing and other merchandise. The three largest “Dollar” store chains — Dollar General, Family Dollar and Dollar Tree — now sport a whopping 28,000 stores.

The bosses’ cutthroat competition is based on keeping out unions at all costs, and keeping “associates” wages low and schedules tightly controlled. Walmart has a national network of training academies where supervisors and department heads are sent for special training to learn “leadership” — i.e., how to manage the workforce and press the most out of them. The company says more than 140,000 middle and upper level employees go to an academy each year.

Starting rates for both Walmart and Amazon workers are currently above the federal minimum wage of $7.25 an hour, a reflection in part of the struggle by workers in fast food and other industries in recent years for a minimum wage of $15 an hour.

What workers at Walmart and Amazon need more than anything else is unionization, to be able to organize to defend themselves and advance their interests against the boss.  
 
 
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