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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Topic: Amazon.com

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December 10, 2014 at 10:06 AM

Amazon workers have an answer: a union

It was always a stretch, Amazon workers suing to be compensated for waits to go through security screening at the end of their shifts. And, sure enough, a unanimous Supreme Court turned them down, citing a 1947 law. The case involved 400,000 plaintiffs. Sure, the high court especially and lower courts generally have favored business in…

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August 8, 2013 at 10:47 AM

Bezos the businessman, a primer

Amazon.com CEO Jeff Bezos (Photo by Andy Rogers / The Associated Press)

Amazon.com CEO Jeff Bezos (Photo by Andy Rogers / The Associated Press)

NOAA reported that Arctic sea ice is disappearing at an unprecedented rate, but the story that has dominated the week’s news is the purchase of the Washington Post by Jeff Bezos, the head of Amazon.com. In the news business, we love to write about ourselves and this is indeed an important turning point. In addition, we’re dealing with the self-centered and blithely corrupt place rendered with wicked accuracy in Mark Leibovich’s new book, This Town. Two of the best pieces come from Pulitzer Prize-winner David Cay Johnston and an open letter to Bezos by Kara Swisher of All Things D. But this is more than a media story or a D.C. tale. So here is a primer for the Other Washington about the Seattle titan who is suddenly much a part of its life, based on my years of Amazon watching and what sources have told me.

1. Bezos is a data guy. It was data that caused him to see both the coming exponential growth of online retail and the niche for selling books online. And everything from there has been founded on his genius for seeing through the noise and identifying the right metrics. Among his critical insights has been using customer data to build relationships and brand loyalty. This makes him brilliant at turning vision into execution, the rocks upon which many good ideas by other entrepreneurs have been smashed.

2. Bezos knows Wall Street. Before driving west to found Amazon, he worked for the hedge fund D.E. Shaw (former Treasury Secretary Larry Summers is another alum). He knows how the playerz and investors think. So even though Amazon has razor-thin margins in many areas and keeps turning in disappointing profits, Bezos has persuaded investors of a big payoff to come. The stock has responded accordingly.

3. He’s a tech guy. Everything Bezos does, including at Amazon, has a super geek quality to it. Technology — making leaps and leveraging the advanced systems already available — is behind everything Amazon does, from its own sales and providing a platform for other sellers to cloud computing and fighting IBM, the embodiment of the establishment, over a contract with the CIA worth as much as $600 million. When most Americans think of Seattle and technology, they think of Bill Gates. Today, Jeff Bezos is the leading tech visionary in town, and perhaps, with the death of Steve Jobs, in America.

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July 30, 2013 at 11:01 AM

Digging into the ‘Amazon effect’

President Obama talks with Sarah Richey as he tours the Amazon distribution center in Chattanooga, Tenn. (Susan Walsh / The Associated Press)

President Obama talks with Sarah Richey as he tours the Amazon distribution center in Chattanooga, Tenn. (Susan Walsh / The Associated Press)

As President Obama tours the Amazon.com distribution center in Chattanooga, Tenn, today, he is partly celebrating the company’s announcement that it would add up to 7,000 jobs. Most of the media swallowed this announcement Monday without being bothered to use the “series of tubes,” as Alaska’s late Sen. Ted Stevens memorably called the Internet, to find my Seattle Times colleague Amy Martinez’s groundbreaking look at the company’s practices, including dismal working conditions at many of its warehouses. It is not a particularly apt place to trumpet middle-class wages, either. Amazon, which is not very forthcoming for such a large corporation, did not say what these jobs would pay. But the starting wage at the Phoenix distribution center in 2010 was $11 an hour; according to the MIT Living Wage Calculator, one adult with a child would need to make $19.87 in Arizona to stay out of poverty. The site warns, “The estimates do not reflect a middle class standard of living.”

Amazon has used its power over the supply chain and tax advantages to wreak great destruction in traditional retail. Former Labor Secretary Robert Reich (@RBReich) tweeted yesterday, “Progress on jobs front? While Amazon adds 5,000 warehouse jobs it destroys 50,000 retail jobs.” But does the “Amazon effect,” although real, risk being overstated? See this chart:

Retail1990_2013

It shows total retail employment in the United States over the past 20 years. As with many sectors, the decline was sudden and deep with the Panic of 2008 (aka “the Great Recession”). But with more than 15 million retail workers in June, employment has climbed back to 2004 levels. (And yes, dear reader: Amazon sells my mystery novels; so do brick-and-mortar stores).

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July 9, 2013 at 10:26 AM

Kroger expands, with Amazon in its nightmares

An AmazonFresh truck arrives at a warehouse in Inglewood, Calif. (Photo by Kevork Djansezian / Getty Images)

An AmazonFresh truck arrives at a warehouse in Inglewood, Calif. (Photo by Kevork Djansezian / Getty Images)

Years ago, mighty Kroger tried a foray into the Southeast and had its head handed to it. This time, instead of trying to grow organically, Kroger is buying its position outright with the $2.44 billion acquisition of Harris Teeter Supermarkets. It’s a funny name, but in affluent markets such as Charlotte, N.C., Harris Teeter is the upscale store in competition against the likes of Food Lion, Bi-Lo, Publix and, increasingly, Wal-Mart. Harris Teeter has typically enjoyed better margins in this razor-slim business.

Kroger, headquartered in Cincinnati, will likely run Harris Teeter by its existing name, as it has Fred Meyer and QFC. Indeed, this is Kroger’s biggest acquisition since it bought Portland-based Freddy’s  in 1999 for $13 billion. But it marks further industry consolidation and more homogenization. Harris Teeter, founded in 1960 by W.T. Harris and Willis Teeter, employs 25,000 in 200 stores across eight states. There’s little overlap, but jobs will no doubt be clearcut at Harris Teeter’s headquarters in suburban Charlotte.

Seattle is among the fortunate cities with some choices that include chains but also local Metropolitan Markets and a number of individual stores, such as the upscale Ralph’s in Belltown and plenty of neighborhood bodegas along with a “buy local” ethos. Oh, there’s that market at the foot of Pike, too. But for most communities, it’s all chains, all the time.

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Comments | More in Amazon.com | Topics: Amazon.com, grocery sector, Harris Teeter