Small firms’ fury as Amazon offers £3,000 sign-up bonus to attract Christmas staff

Warning that online giant’s move will lead to higher prices and empty shelves in shops

Amazon is offering signing-up bonuses of up to £3,000 in areas of Britain with labour shortages, to attract workers in time for the Christmas surge in demand.

The Food and Drink Federation says there is a “battle for labour” in the run-up to Christmas, with Amazon trying to recruit 20,000 temporary staff. Many food and hospitality firms cannot compete with the pay now being offered by the online giant and this may affect Christmas deliveries and supplies.

Ian Wright, chief executive of the Food and Drink Federation, said the Amazon bonuses being advertised online for full-time and seasonal staff were a “knock-out blow” for smaller companies. He said: “There isn’t a vast reservoir of British workers just waiting to be fought over. It’s incredibly difficult to get Christmas staff labour in many areas.

“It will mean higher prices and fewer choices on shelves. Suppliers will almost certainly produce shorter runs of product and if they can, they will look at higher prices.”

The highest Amazon sign-on bonus of £3,000 for full-time workers is being advertised at the firm’s Exeter warehouse. Temporary sorting staff at a warehouse in Weybridge, Surrey, are being offered £2,000 signing-up bonuses. Temporary recruits in Leeds are being offered £1,500. The 93,000 square-metre Amazon warehouse in Dunfermline in Fife, Scotland, is also offering signing up bonuses for £1,500. It is the company’s biggest warehouse in Britain, sorting and packing items across Scotland and the north of England.

An Amazon spokesperson said: “Amazon is hiring for seasonal positions across its UK network during the festive season. We are also currently offering a sign-on bonus at a number of locations to attract new permanent and seasonal associates.”

Retail experts have warned that Christmas food and toy shopping is likely to be hit by labour shortages and bottlenecks in the supply chain. Clive Black, a retail analyst at Shore Capital, has warned that Christmas may be a “nightmare for consumers”.

Kate Martin, of the Traditional Farm Fresh Turkey Association, has warned that there are likely to be fewer turkeys on supermarket shelves this year because of the shortage of workers to process them. Iceland supermarket has reported a surge in the sales of frozen turkeys.

Andrew Opie, director of food and sustainability at the British Retail Consortium, said there would be ample food supplies at Christmas, but the selection might be more limited.

“There won’t be a problem in getting a Christmas lunch, but there may be a reduced choice because of the reduced labour,” he said. “I can’t remember the time when the supply chain has been under such pressure and it means every little bump has an impact.”

Shoppers are being advised to stock up early with Christmas supplies and presents. The online food retailer Ocado has already opened up its Christmas delivery slots, and shoppers have complained on social media that many are already sold out.

Grant Liddell, business development director at Metro Shipping, a Birmingham-based freight forwarding company, told the Financial Times last week that shipping container delays at Felixstowe were likely to spread to other ports. He said there were “definitely going to be shortages at Christmas”. He warned that toys, clothes and furniture sales were most likely to be affected.

The British Toy & Hobby Association has warned that the toy sector faces fewer transport options and higher costs. The association said: “There are plenty of toys to choose from presently but, in common with other sectors’ advice, buying early – especially if buying for a Christmas or a birthday present – is prudent.”

Gary Grant, founder of The Entertainer, one of the country’s biggest toy retailers, said: “If you know what you want to buy your child, don’t be chasing round the country in December.”

Grant said his toy chain had already released its Black Friday offers because of the uncertainty of supplies in late November. He said: “It’s crazy to be saving up things for a Black Friday because in six weeks’ time we might not be able to manage demand.”

The London toy shop Hamleys last week released its predicted top 10 list of Christmas presents, including Lego Super Mario Luigi, costing £50; Playmobil Police Robot, costing £20; and Mattel Barbie Dreamhouse costing £310. It said there were plentiful supplies of stock.

Contributors

Jon Ungoed-Thomas and Michael Savage

The GuardianTramp

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