Amazon.com Inc. (
), the world's largest online retailer, might continue to face
strikes in 2014 by its German employees demanding higher pay and
a better work environment.
Many workers are continuing their strikes at two major
distribution warehouses - Bad Hersfeld and Leipzig - threatening
to disrupt shipments during the peak holiday season. According to
Amazon, the deliveries were on time despite 1,115 employees
joining the strike at important sites.
The German employees organized many short strikes this year at
Amazon's major distribution centers viz. Bad Hersfeld,
Leipzig and Graben, to force the company to accept their
The demands of the German workers include the right for
collective bargaining, proper working conditions and regard for
their hard work. However, Amazon claims that the current wages
are above-average in the logistics industry.
Germany is Amazon's biggest European market, with sales
reaching more than €6.5 billion in 2012. Though the company
assured that previous strikes had not affected deliveries, the
current strike could be a serious matter of concern.
Seeing the increasing problems in Germany, in October, Amazon
announced its plan to open two new fulfillment centers in the
Czech Republic by the end of 2014 to cater to the increasing
demand across Europe.
The growing demand for online shopping has led to the need to
expand the fulfillment centers.
Fulfillment centers are giant warehouses that help Amazon and
other online retailers to store products, ship them and handle
returns quickly. These are important for providing the level of
customer service that Amazon's customers have come to expect from
As accurate delivery of products is very important for the
success of an online retail company, these strikes could delay
product delivery during the peak holiday season, which in turn
could translate into losses for the company.
Currently, Amazon's shares have a Zacks Rank #3 (Hold).
Better-ranked stocks that have been performing well include
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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