The times are a-changing, as Bob Dylan famously said, and this is especially true in the retail food and drug business. Two major drivers of change in the 21st century have been corporate consolidation and technological innovation, and we can expect these factors will remain in play in the foreseeable future. Consider these two recent developments:
Supermarket News reports that the private equity firm KKR & Co. is offering to purchase Walgreens Boots Alliance (WBA), owner of 9,560 Walgreens and Duane Reade drug stores across the United States. If WBA accepts the purchase offer, it would result in the largest leveraged buyout ever, valued at approximately $56 billion. In 2017 Walgreens attempted to acquire Rite Aid at a cost of $17.2 billion, but that deal was blocked by federal regulators who said it would go too far in reducing competition marketplace. Instead, Walgreens ended up buying 1,392 Rite Aid stores for 4.4 billion in 2018. Many of those stores were then closed because they operated near existing Walgreens stores. Walgreens and Rite Aid are both having a tough time competing against CVS Health, which has become a giant in the health care field after acquiring Aetna Inc. In addition, Amazon is expected to enter the retail pharmacy business in a big way following its acquisition of the online pharmacy PillPack. How would a buyout of Walgreens by KKR affect union members? That’s a hard question to answer. Walgreens is almost entirely non-union, except for some Rite-Aid stores it operates and a few Walgreens stores in San Francisco. On one hand, it’s possible that new ownership could present new opportunities for organizing retail drug workers across the country. On the other hand, if KKR takes a strong anti-union stance, a revitalized Walgreens chain could pose a threat to union-affiliated stores operated by both Rite Aid and CVS.
The Dutch retail conglomerate Ahold Delhaize is testing a new small-store concept called lunchbox (with a small “L”) that lets customers pick items off the shelves and take them home without going through a checkout line. This “frictionless checkout” concept is similar to Amazon Go, which charges shoppers and then debits their accounts automatically and invisibly. According to an article in Supermarket News: “products removed from the stores shelves are detected by artificial intelligence (AI) running on Intel Core i5 and i7 processor-based systems optimized with the Intel Distributions of OpenVINO toolkit. Likewise, anonymous body skeletal tracking connects the products taken to the shopper who removed them from the shelf. This doesn’t mean customers are scanned down to their skeletons, but it uses their body shapes to construct simulated skeletons which are then tracked through the store. In addition, cameras embedded throughout the store track the shoppers eye movements. This sounds creepy and Big Brother-ish to me, but the really important problem with this technology is that it destroys jobs for human beings. And without jobs, how will people be able to buy food from these stores? One thing is certain: You won’t find me shopping at these stores or even using self-checkout stands at regular supermarkets. I’d rather deal with a real person, a union member who cares about who I am and how my day is going. Someone who doesn’t see me as a simulated skeleton moving through a digitized matrix. The times may be a-changing, but respect for people is a value that never changes. Happy Holidays to all of the humans in our union family.