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Can Worker Strike Affect Amazon's (AMZN) Prime Day Prospects?

Amazon AMZN workers are planning to go on a strike in Germany in order to mar the prospects of the company during its mega shopping event — Prime Day 2022.

Reportedly, the Verdi union, along with workers from Amazon’s seven German distribution centers, has organized a protest against poor pay and unfair working conditions.

The union demands the acceptance of a collective pay agreement through the strike.

Moreover, the union has claimed that even though workers’ wages are being increased repeatedly, extension in working hours and negligible compensation for working during public holidays are hurting their sentiments.

Notably, the strike is scheduled during the peak shopping hours of Prime Day.

Amazon.com, Inc. Price and Consensus

 

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Disruption at Amazon

The underlined workers’ walkout remains a huge concern for Amazon.

Notably, the strike is going to take place at distribution centers in Augsburg, Leipzig, Koblenz, Rheinberg and Werne, and two centers in Bad Hersfeld, according to the Verdi union.

Warehouses aid the company in storing and shipping products, and handling returns quickly. These are crucial for Amazon as they help in providing a better shopping experience to its customers. Also, the company’s robust delivery network helps in the ultra-fast delivery of orders.

We note that Germany remains one of the key markets for Amazon’s e-commerce business. Thus, the latest move of workers is likely to disrupt the company’s capacity to cater to the rising customer demand during the Prime Day event.

Consequently, this might impact the performance of the company negatively. All these might make the investors apprehensive about the stock.

Notably, Amazon has lost 30.7% on a year-to-date basis.

Amazon’s Stance

The e-commerce giant has reportedly claimed that the workers are availing excellent work environment, with good pay and other benefits.

Reportedly, it hiked the workers’ wages to 12 euros per hour last year. This autumn, the company intends to increase the wages further to at least 12.50 euros per hour.

The company has also claimed that there is no extension in working hours and never called the workers to work on public holidays.

These facts are likely to help Amazon pass through this strike.

The company’s robust fulfillment network in Germany is capable of negating the impacts of the underlined strike.

Its strengthening initiatives for the event — focused on providing an enhanced shopping experience on its robust product offerings, deep discounts on various items and Prime benefits — are likely to aid it in gaining traction among customers.

Amazon’s automation drive-through robots in its fulfillment centers are on a high and remain major positives.

The above-mentioned facts are likely to continue to aid the company’s Prime Day sales growth and market position.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector are Solo Brands DTC, AutoNation AN and The Kroger KR. While Solo Brands currently sports a Zacks Rank #1 (Strong Buy), AutoNation and Kroger carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Solo Brands has lost 69.4% on a year-to-date basis. The long-term earnings growth rate for the DTC stock is currently projected at 16.74%.

AutoNation has lost 2.6% over a year. The long-term earnings growth rate for AN stock is currently projected at 24.74%.

Kroger has gained 6.1% on a year-to-date basis. The long-term earnings growth rate for the KR stock is currently projected at 11.27%.


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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
The Kroger Co. (KR): Free Stock Analysis Report
 
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