Six months ago, Amazon caused fear for the long-term future of grocery store jobs with Amazon Go, its first experimental cashier-less grocery store.
But it was just one store. Amazon didn't have much of a presence in the real world. It's something to worry about but maybe not immediately.
On Friday, those concerns suddenly become a lot more tangible when Amazon announced that it had agreed to buy Whole Foods for $13.7 billion.
The acquisition solidifies Amazon's growing dominance in the grocery market, from delivery through Amazon Fresh to plans to revolutionize in-person grocery shopping. Owning Whole Foods will ingratiate Amazon even more into every aspect of its customers' lives—and in this case, the lives of especially high-income shoppers.
But before buying Whole Foods, Amazon already had a vision for the future of groceries. And it wasn't too great for employees.
Did every cashier at Whole Foods just get a pink slip, even if they don't know it yet? Even if it doesn't take effect for another 10 years?
Amazon Go
Amazon's most high-profile grocery endeavor prior to its Whole Foods acquisition featured "the world's most advanced shopping technology."
That technology is a grocery store with no lines and no checkout—and no cashiers. The jobs at an Amazon Go store are pretty much limited to stocking shelves, preparing food, checking IDs for alcohol, and making sure the apps and security work.
As automation experts said when Amazon made its plan public in December, this shift doesn't necessarily eliminate jobs entirely—but it does eliminate low-skill jobs. Instead of hiring cashiers, Amazon needs more engineers. And that contributes to growing inequality.
Whole Foods
Amazon doesn't necessarily want to turn Whole Foods' 465 stores into Amazon Go locations. The Whole Foods brand is valuable as it is.
“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue," Amazon founder Jeff Bezos said in the press release announcing the acquisition.
His words were echoed by Brittain Ladd, a supply chain expert who has worked for Amazon.
"Amazon fully understands that what makes Whole Foods such a valuable grocery retailer is the fact that individuals who work in those stores are knowledge workers, not store labor," Ladd said. "Amazon recognizes the value of human interaction in grocery retailing and will not strive to make Whole Foods stores look like Amazon Go."
Still, Amazon wouldn't have bought Whole Foods if it didn't plan to shake up the chain with its own technology. Even though Amazon values the expertise that makes Whole Foods stand out in the grocery market, it'll still probably streamline operations at Whole Foods and cut down on the cashiers needed.
Most importantly, Amazon will use its Whole Foods locations as distribution centers for Amazon Fresh. And Amazon will leverage its own technology to bring down prices at Whole Foods, Ladd said.
Whole Foods is now Amazon's grocery supply chain.
Grocery jobs
Amazon's $13 billion acquisition is significant to more workers than just those at Whole Foods. The rest of the grocery stores in the United States were already watching out for Amazon—and now they just got a major push to get more competitive.
At regular grocery stores like Kroger and Safeway—where pricing, not expertise or customer service, is the main draw—Amazon's potential to bring down prices at Whole Foods poses a major threat. And that could change jobs at those stores, too.
"If you’re Kroger, you now know you have a serious competitor staring you in the face in Amazon," Ladd said. "All other grocery retailers are now going to have to learn to become more like Amazon and frankly more like Whole Foods. They have to make the investment to ensure store associates are able to be more friendly and provide more knowledge to customers—that they're more capable of establishing relationships so customers won’t abandon the brand and go to Amazon."
Those stores will turn to technology, too, to trim the number of cashiers needed in stores, change the way managers run store locations, and maximize their use of e-commerce.
So even if Whole Foods employees who are valued for their knowledge and customer relationships are safe, Walmart employees might not be.
Grocery, it's your turn to face the wrath of Amazon. Try to protect your workers.
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