Location, Location, Location: Why Amazon Has a Whole Foods Problem

When Amazon acquired Whole Foods in 2017, the potential for a corporate culture clash loomed large. Those concerns are about to be realized as a unionization effort takes hold at Whole Foods. Similar efforts have failed at Amazon but the Whole Foods organizers may have a not-so-secret weapon in their toolkit: location.

Location and Amazon

Amazon is well known for a business model that focuses on customer service as an outcome of its ability to fulfill orders at low cost, high volume, and lightning speed.

In terms of labor relations that approach requires an automated, data-driven assessment of employee performance, a tool that Amazon has honed to perfection.

An emphasis on data collection does not necessarily lead to onerous workplace conditions, but it easily can. An article about Amazon’s fulfillment centers in The Verge earlier this year draws a portrait of a punitive system that resembles some of the worst aspects of assembly line work, including termination for those who fail to keep up.

A fair question to ask is why someone would continue to work in an overly burdensome environment. After all, the unemployment rate is low, and many companies are on the hunt for new recruits.

That’s where location comes in. Though average unemployment in the U.S. is low, pockets of poverty and lack of opportunity create the conditions for workers to take and keep jobs regardless of their treatment in the workplace.

In locations like these, employers can continue practices that would otherwise result in high turnover and short staffing.

Somewhat ironically, last year The Atlantic observed that presence of an Amazon fulfillment center in a struggling community can make conditions worse for that community's residents, or fail to improve conditions, rather than helping to create new opportunities.

Location and Whole Foods

The location factor has worked in favor of Amazon’s factory-like business model, but it could prove to be the monkey wrench when it comes to Whole Foods.

In contrast to Amazon’s fulfillment center location strategy, Whole Foods built its expansion on the ability to spot communities that are on the way up; in other words, where other employment opportunities are growing. In fact, Whole Foods has become known for attracting many other retailers, including other grocers, into up-and-coming communities.

Part of that success revolves around a broader trend of locating supermarkets and other large stores within residential and mixed-use buildings, an option that is simply not available to oversized warehouse-style operations like Amazon fulfillment centers.

In sum, Whole Foods faces more competition for qualified workers at its locations, especially for those who have excellent social skills that allow them to connect with customers.

Brand reputation on the decline

Even before the Amazon acquisition, workplace practices at Whole Foods were coming into conflict with its Whole Trade model for ethical practices and working conditions in its supply chain, and with the aims of its Whole Planet Foundation.

The pile-up of pre-Amazon complaints may have contributed to a relatively low rating of #58 for Whole Foods in Forbes’s 2017 “Best Places to Work” list. That’s a sharp drop-off from its 20-year consecutive record of earning a slot in the top 20.

Under Amazon, reports of deteriorating conditions and pay issues continue to surface, despite last year’s pledge by founder John Mackey to renew its focus on “worker happiness.”

Last spring The Guardian reported on pay and scheduling issues at Whole Foods that offset the benefits of Amazon’s new minimum wage policy.

In July, The Guardian also cited Whole Foods employees who reported pressure related to Amazon’s policy for promoting its Prime deals, as well as “widespread understaffing, increased workloads and labor budget cuts."

Whole Worker makes the connection

Pushback against union organizing efforts at Amazon have been “aggressive,” according to a report in Gizmodo last September. That report was based on a leaked training video that advised managers to be alert for “Warning Signs” of organizing, including employees “who normally aren’t connected to each other suddenly hanging out together” and any other “behavior that is out of character.”

Gizmodo reported that the union organizing group Whole Worker leaked the video. Last week the group turned up the pressure with an open letter connecting worker conditions at Whole Foods with the more expansive issue of Amazon’s complicity with the Trump administration’s immigration policies.

Published as a Google document, the anonymous letter aims to show “solidarity with our undocumented sisters, brothers, and siblings” by placing workplace conditions in the context of Amazon’s other business practices.

The letter specifically focuses on the company’s work with Palantir, the big data firm co-founded by Silicon Valley investor Peter Thiel. Thiel was an instrumental supporter of the 2016 Trump presidential campaign and is also associated with anti-immigrant organizations.

Whole Worker cites Plantir for providing “software that helps ICE in the deportation of undocumented people.” It also notes that Palantir has been associated with the misuse of information by private data-gathering companies, targeting individuals involved in union organizing and activism.

Whole Foods, Amazon and the "Wayfair Effect"

The letter reflects concerns similar to online petitions and employee actions at other companies. However, it stands out for its appeal to decision-makers, management and talent at Amazon to engage in street action.

After calling upon Amazon to cut ties with Palantir and end the sale of its Rekognition software, the letter concludes by calling out Amazon workers for their roles in the plight of immigrants and whole Foods workers alike:

“Workers that control the levers inside Amazon must make this machine stop and turn in another direction. Bodies inside this machine are being mangled as it tramples on our homes, destroying families and communities. If you have your hand on one of those levers, ask yourself what can you to stop it?"

What, indeed?

The link embedded by Whole Workers provides a hint. It refers to a high-profile walkout by employees of the home furnishings company Wayfair. The walkout occurred not at some remote factory or fulfillment center. It happened at Wayfair’s headquarters in downtown Boston, where the action maximized media attention and bystander participation.

Bringing that kind of activism to the tony and up-and-coming communities hosting Whole Foods stores could have a similar impact.

With employee activism on the rise at Amazon and elsewhere, Whole Foods may need to rethink how the company has been affected by Amazon’s business model and reexamine its roots.

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