How a small town learned to stop worrying and love Amazon

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DARLINGTON, England—Many traders in this old market town hold Amazon.

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com Inc. partly to blame for the closures of a series of local stores in recent years.

Then Amazon opened a warehouse here.

The facility, which opened in early 2020, employs 1,300 full-time staff, making it one of the largest employers in the city. It hired 500 additional seasonal workers during the end-of-year holidays. Wages start at £10 (equivalent to $13.25) an hour, above the legal minimum, and benefits include private healthcare and an education allowance of £8,000 available in installments on four years.

The new jobs have all given the town of 100,000 people in northern England an economic boost, while also triggering a revaluation of the US e-commerce giant. Gift shop owner Nicola Reading still blames Amazon for the demise of the local retail scene, but sees it as a benefit too.

“It looks like Amazon now employs half the population of Darlington,” she said.

Already the second largest employer in the United States after Walmart Inc.,

Amazon is making progress in Europe and the UK, investing 78 billion euros ($89 billion) since 2010 in a continent-wide expansion that has accelerated significantly in recent years. Amazon employs over 55,000 full-time people in the UK.

The investment surge has triggered a softening of attitudes toward the e-commerce giant in places where the company has invested, according to Amazon executives and government officials.

Long-standing concerns about Amazon’s dominance have not gone away in Darlington, said Peter Gibson, the town’s Representative to Parliament. But the town is better off with the Amazon warehouse, he said: “Do I want to see more jobs in Darlington? Yes.”

Working at Amazon offers greater flexibility than many other jobs, said Rajesh Nayun, left, whose work schedule allows him to care for his school-aged children in the afternoons when his partner works his own shift in the Darlington warehouse. Roxana Rincu, center, helps maintain the hundreds of robots deployed in the facility’s huge storage areas and welcomes the career path offered by the company. Paul Tait, right, selects and packs items for shipment to the busy floor of the facility.

Amazon remains the target of many critics. In late November, independent UK retailers staged a Black Friday protest – shutting down their websites for a day – to raise awareness of what they say is the dominance of Amazon and big chain retailers. On the same day, activists blocked warehouses at 13 of Amazon’s 26 UK locations, including Darlington, accusing it of harming the economy and the environment.

Amazon said it takes its environmental responsibilities seriously and is committed to net zero carbon emissions by 2040. It also highlighted its contributions to the UK economy, saying it has created 10,000 local jobs in 2021 alone. The company said thousands of independent retailers benefit from using its online marketplace to reach a national audience.

Nearly half of Amazon’s European investments have been made in the United Kingdom, which together with Germany accounts for three-quarters of Amazon’s revenue in Europe, its largest market outside the United States.

The pandemic has spurred Amazon’s expansion in Europe, as confined consumers flocked online. Amazon rushed to meet demand with the help of new fulfillment centers and other smaller facilities. The company has opened 11 centers in the UK, including the one in Darlington, over the past three years. This compares to 15 new locations over the previous two decades.

Amazon sales in 2020 were up 51% in the UK compared to 2019, compared to 36% in the US over the same period. It is now the country’s second-largest retailer by sales, behind grocery chain giant Tesco PLC, according to Edge Retail Insight.

Local Darlington officials have applauded the arrival of Amazon, which they say has benefited the town, primarily by creating jobs. Amazon’s presence also encourages young university graduates to stay in the city and attracts other businesses, said Mark Ladyman, deputy director for economic growth at Darlington Borough Council.

Home to the world’s first public railway two centuries ago, Darlington now serves as a logistical and technical hub for the North East of England. Engine manufacturer Cummins Inc.

has had a factory here since the 1960s. Like many other mid-sized towns across the UK, it flourished in the 1980s as a regional destination where shoppers could find a mix of independent stores and brand names the best known in the country.

After decades working in a 150-year-old grocery stall in Darlington’s indoor market, Sue Forster, left, is pessimistic about the future of retail in the town. “Town centers are just changing, not disappearing,” said Robin Finnegan, center, who opened his shop in Darlington 50 years ago. Grocer David Gaskin, right, attributes the dwindling prospects for local retailers to supermarkets, outlying malls and the rise of e-commerce.

“All roads used to lead to Darlington,” said David Gaskin, shopkeeper at JJ Blair & Sons, a 150-year-old grocery stall in the town’s historic covered market, which houses traditional market stalls under a Victorian glass and steel building. roof. By the 1990s, Darlington’s heyday as a shopping destination was over.

“First we had the supermarkets, then there were the out-of-town developments,” said Mr Gaskin, 67, a 30-year veteran of the market. In 2001, Dressers, a beloved local stationer that began printing railroad signs and timetables in the early 1800s, went bankrupt along with other family stores.

The rise of e-commerce and the financial crisis have increased the pressure. Local Marks & Spencer outlets,

the British high-end grocery chain and British Home Stores, a national chain of department stores, have closed.

“I was suddenly surrounded by a ghost town of empty shops,” said Ms Reading, who opened her gift shop, Bliss Gifts, two decades ago. A third of UK stores have disappeared over the past decade, according to the Center for Retail Research.

Then, the Covid-19 arrived, closing some stores temporarily and others permanently; workers found new opportunities in Darlington hard to come by.

But Paul Tait, 27, who previously worked at the nearby Cummins plant, found one as a packer at Amazon when it opened in April 2020.

Capable of handling more than 2 million packages per week, the Darlington center is a deafening maze of conveyor belts carrying everything from books and snacks to toys and electronic gadgets. In fenced storage areas, hundreds of orange robots intricately arrange moving shelves filled with items. And among the machines, teams of human operators like Mr. Tait pick and pack goods for shipment.

Amazon’s Darlington warehouse is capable of handling over 2 million packages per week.

The GMB union, which represents UK retail workers, has accused Amazon of unsatisfactory working conditions at its UK facilities. The union has criticized Amazon’s labor practices for requiring workers to perform repetitive tasks at a pace it considers excessive. He also criticized Amazon’s health and safety record, citing serious accidents or near misses at Amazon’s UK facilities between 2016 and 2019.

“Amazon is a safe place to work,” the company said in a statement responding to union demands. He said critics painted a false picture of his work environment.

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In addition to workers’ wages and state taxes, Amazon pays Darlington around £1.2million a year in local business taxes, according to public statements from the council. It wouldn’t say where Amazon ranks among the biggest taxpayers in town.

The economic weight, however, creates new problems, said Mr Ladyman, the Darlington council leader. The warehouse has made it difficult for other businesses in the area to hire staff. Pubs and restaurants, in particular, are struggling to find workers.

Some, Ladyman said, “can’t compete with Amazon on compensation.”

Chinese e-commerce giant Alibaba is challenging Amazon by promising fast deliveries from China to anywhere in the world. The WSJ visits Alibaba’s largest automated warehouse to see how robots and an extensive logistics network are helping it grow globally. Composer: Clement Burge

Write to Trefor Moss at Trefor.Moss@wsj.com

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