Amazon to suspend all non-essential shipments to warehouses: Rpt

Yahoo Finance’s Emily McCormick joins The Ticker to discuss Amazon's actions amid the coronavirus, as Business Insider reports the e-commerce giant is stopping all shipments other than medical supplies and household staples to its warehouses.

Video Transcript

- Amazon is suspending all shipments of products other than medical supplies and household staples to its warehouses. Important distinction there according to Business Insider. Yahoo Finance's Emily McCormick joins us now with the latest. Emily, I mean I guess it would make sense since they want to conserve space and resources specifically tied to what might be most needed in a crisis like this.

EMILY MCCORMICK: Right. So this move really speaks to just that panic buying phenomenon that we've seen, not just for these big box retailers, for these warehouse retailers like Costco, but also for these e-commerce giants like Amazon. So with this move, Amazon is saying that the only items that can really be shipped are canned beans, things like diapers, dog food, disinfecting wipes, medical supplies, and household goods that are considered essentials. Examples of things that won't actually be shipped to these warehouses are jeans, phone cases, and other non essentials.

And these restrictions are set to last through April 5. These apply both to large vendors and to third party sellers who list items to sell on amazon.com directly. And you know, I think what's really important about this notice, though, is that it's not immediately clear what the impact is going to be for consumers. Because we know this is going to impact the warehouses. But given that we're not seeing as much consumer spending-- we just had that retail sales report out earlier today and it disappointed-- that they aren't spending as much on these non essentials.

It's not clear how quickly they're going to actually deplete these warehouses of the non essentials. So I think, overall, it is being taken as a good sign that Amazon is stocking up mostly on these essentials.

- Another question as it relates to the demand that we've seen for Amazon, they're talking about hiring 100,000 additional workers out there. I mean, guess the first question is, where are the workers?

EMILY MCCORMICK: Right.

- And what's the plan? And what's the timeline right now?

EMILY MCCORMICK: Yeah. So Amazon is looking to hire 100,000 full time and part time workers. They're investing $350 million, and this is globally, in order to increase pay by $2 per hour in the US, two euros per hour in the UK and in other parts of EU countries. So they are trying to really bolster their workforce here.

I think one of the things that Amazon really has hitting it on both sides is the fact that, yes, they are providing what many people would consider to be an essential service for those who don't want to go out and physically purchase things in actual grocery stores and other brick and mortar locations. But at the same time, they are coming under some flak for keeping their warehouses open, potentially endangering the workers that they are now actually increasing the staffing for amid the coronavirus outbreak. So it is an issue.

- That seems to be the challenge that a lot of these essential stores are having to deal with. You know, we've got grocery stores where we've already seen the long lines in places. I mean, here in New York we've seen the lines out the door in places like Trader Joe's. But you know, the reality is these places need to stay open. But they've also got workers who are concerned about their own safety, as well. I mean, what are you hearing among other grocery store chains about how they're going to try to get the scheduling and keep up with the demand moving forward?

EMILY MCCORMICK: Well, we are hearing about different retailers cutting back hours. Of course, we have New York that's actually shutting restaurants, bars, and some of these other non essentials. But looking at Amazon specifically, it's even more of an issue in Europe where we have some of the center of the outbreak. So Italy, Spain.

We have Bloomberg and CNBC reporting that warehouse workers had tested positive in at least a couple of these locations and that some of these workers had talked about potentially going on strike, really fighting for the rights that they feel that they have as workers as some of these other employees who aren't in the warehouses are able to work from home. It's something that they haven't been able to enjoy, as well.

- Yeah. And you just wonder what would happen, too though, if-- if all of those DoorDash delivery, food delivery people, grocery delivery people were also ordered to lock down like what we're seeing out of San Francisco and potentially--

- Well, I was going to say, I mean, if you go further down the supply chain, right? When you look at farmers out of California, what if a lot of those farmers tested positive? I mean, they are sort of the-- the essential workers out there to keep up with this demand. So it seems like there's a lot of questions that still need to be addressed. I mean, it really is unprecedented the kind of actions that we're seeing from these stores.

EMILY MCCORMICK: Definitely. Could come from the companies. It could from the-- come from the government or some combination of the two. And I think that that's we're waiting to hear next.

- Yeah. And we're going to see what city responses across the country will look like. We've already seen drastic measures taken on the West Coast. Could be taken here on the East Coast, as well. But for now, Emily McCormick, thank you so much for joining us.