Monday, April 13, 2020
Amazon puts online grocery customers on the waitlist
Amazon has had a huge increase in demand for online groceries as the coronavirus outbreak continues to grow. There has been such a huge increase in demand that Amazon has decided to put new grocery delivery customers on a wait-list. They have also decided to restrict online store hours for some Whole Foods stores. Existing customers had already begun to experience a shortage in delivery slots which is what led this decision which was put in place today. Amazon acquired Whole Foods in 2017 for about $14 billion. Amazon's grocery delivery service includes Whole Foods, Amazon Prime, and Amazon Fresh, making the company a huge force to be reckoned with. The company's grocery order capacity has increased by over 60% during the virus outbreak. Amazon is now hiring more workers to help ease the large amount of traffic. They're even offering hire wages for grocery delivery versus the normal warehouse workers, hoping to incite a shift in the labor sector.https://www.cnbc.com/2020/04/13/amazon-stops-accepting-new-online-grocery-customers-amid-surging-demand.html
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I think that it is great that Amazon is offering more jobs during this outbreak, since so many workers are getting laid off. There is definitely a shortage in stores for groceries, so hopefully Amazon can help catch up on the demand for groceries. In addition, workers will likely feel safer working in an Amazon Facility than a grocery store.
The idea of increasing wages for workers in Amazon to lure individuals to their firm has two sides: the advantage and the disadvantage. Now that the demand for groceries has grown, it is only logical to employ new workers to reduce the time taken to make deliveries and improve customer service. On the other hand, this strategy is depriving other stores of labor, which might make them run out of business. The ultimate and feared result of such actions is a monopoly where Amazon will be the dominant supplier of groceries. Monopolistic firms tend to be exploitative in terms of the prices they charge their customers. Another view that may be possible to counter the current problem of congestion is rising of new firms that offer better services in less time. This action may attract competition for Amazon. Hence I suggest they look for a more feasible option that will maximize the Pareto Optimality concept.
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