Amazon’s First Kill in Grocery Retail? Gordy’s Warns of Mass Layoffs

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Amazon’s Whole Foods Acquisition Finds First Victim in Grocery Retail

Within days after writing that Amazon.com, Inc. could kill more retail jobs with its Whole Foods Market, Inc. acquisition, we have received our first confirmation. A half-century-old grocery chain in Wisconsin is about to bite the dust, leaving more than 1,000 retail workers without jobs.

It seems like Amazon just gave President Donald Trump another reason to blame it for job losses in retail.

Grocery chain Gordy’s Market, a household name for Wisconsin residents, has announced that it is seeking a potential buyer for its remaining stores. In the event that it fails to find a good suitor, the company may be forced to shut down those stores, resulting in mass layoffs.

Gordy’s has indicated that all 25 of its locations will be affected in the fallout. The company has already begun seeking suitable parties to buy the stores, and will continue to look for another 60 days.

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The timing of the announcement couldn’t be more symbolic. Earlier this week, Amazon announced that it would be taking its recently acquired Whole Foods online. The e-commerce giant has just started selling groceries on the Internet, offering its “Prime” members same-day or next-day deliveries.

The move sent shock waves across the grocery retail sector as big-name companies, including Kroger’s Co and Wal-Mart Stores Inc, all saw their stocks tanking following Amazon’s announcement. But, while the bigger competitors may be well positioned to take on Amazon, the biggest blow has come to local grocery chains, which neither have the funds nor the technology to compete with Amazon’s cutthroat pricing or promotional offers.

The Wisconsin-based Gordy’s Market has already closed over a half-dozen stores—including locations in Chippewa Falls, Hayward, and Eau Claire—since Amazon confirmed the Whole Foods acquisition earlier this year.

Earlier last month, the CEO of Gordy’s Market, Jeff Schafer, had announced that the company was undertaking restructuring to make the company nimbler to operate. It seems like the management team has now decided to raise a white flag, sensing the inevitable.

Regardless, the store closures are not only bad news for customers who preferred to shop for fresh groceries at their local grocer; they are a significant setback for locals who worked for the chain.

Source

More than 1,000 Gordy’s employees could face layoffs” WEAU 13 News, August 30, 2017.

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