It’s a retail rumble.
Amazon’s Jeff Bezos on Thursday threw down the minimum-wage gauntlet in his annual shareholder letter, calling out his brick-and-mortar rivals.
“Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage,” Bezos said. “Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”
In the age of online shade, Amazon’s primary brick-and-mortar antagonist wasn’t going to take that sitting down.
Dan Bartlett, Walmart Inc.’s executive vice president of corporate affairs, took to Twitter almost immediately. “Hey retail competitors out there (you know who you are) how about paying your taxes?” he tweeted, linking to a Yahoo Finance story that said “Amazon will pay $0 in taxes on $11,200,000,000 in profit for 2018.”
And then he skipped past Walmart’s starting wage for hourly associates, $11, and added: “The vast majority of our warehouse associates have been making more than $15 for a long time. And they still get quarterly performance bonuses.”
(The federal minimum wage is $7.25 an hour and retailers generally pay more than that. A Walmart spokesman said, “We have increased our starting wages by more than 50 percent in the last three years and currently have an average hourly total compensation of more than $17.50 an hour.” Target Corp. starts store employees at $13 now and is headed to $15).
It might be that Bezos — already an e-commerce wizard — is simply getting more comfortable, even starting to enjoy, his online beefs. He has sparred repeatedly with President Trump and successfully short-circuited the National Enquirer by writing publicly about the “below the belt selfie” he sent to his girlfriend. “If in my position I can’t stand up to this kind of extortion, how many people can?” wrote Bezos, the richest man in the world with a fortune of $152 billion (although he’s set to lose about $36 billion of that in his divorce).
By those standards, the back-and-forth with Walmart is exceedingly tame. But there’s still a certain deliciousness to it all.
Minimum wage is an issue where Walmart is playing defense — a still-new stance for the retail giant, which for decades has been accused by everyone from workers’ groups to local governments to rivals of throwing its weight around to stamp out all competition and squeeze vendors.
Amazon also has its issues when it comes to worker compensation and corporate culture, with strikes in some of its German warehouses over poor conditions and numerous articles about its cutthroat ethos — which very much extends to its competitors. The company was also effectively forced to retreat from its plans to expand its offices in New York as local groups rallied against the giant.
For mere retail mortals, or companies that measure their results in just tens of billions and not hundreds of billions, it’s refreshing to see the big players go after each other.
But there’s little Amazon relief in sight. The e-commerce giant is at a high — it’s $906 billion market capitalization sits more than three times higher than Walmart’s — and the company plans to press that advantage.
“Your margin is my opportunity,” is said to be one of Bezos’ favorite aphorisms.
Bezos sees more margin to be gained from the rest of retail.
In his letter, he said: “Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate. And that’s largely because nearly 90 percent of retail remains off-line, in brick-and-mortar stores.”
That is a chunk of the market too big for Amazon to not go after.
The e-commerce company bought Whole Foods in 2017 and is also rolling out Amazon Go, a concept that uses a mix of technologies to check out shoppers automatically.
“With Amazon Go, we had a clear vision. Get rid of the worst thing about physical retail: checkout lines,” Bezos said. “No one likes to wait in line. Instead, we imagined a store where you could walk in, pick up what you wanted, and leave.”
So while Amazon has raised its starting pay it is also working on technology that increases automation and could eventually reduce the need for workers who would get the lowest pay.
Likewise, Walmart this week posted information to its site under the heading, “How Automated Assistants Are Helping Us Work Smarter” and noted, “Every hero needs a sidekick, and some of the best have been automated.”
Of course, such automation could free workers to get better jobs — somewhere. But very possibly those jobs won’t be at the likes of Amazon or Walmart.