Retail Reduced – May 2024

Union recognition has been achieved for the first time in the long running saga of employee relations at Amazon in the UK.  For years, Amazon has been under scrutiny for its treatment of its warehouse workers. In 2018, James Bloodworth, author of ‘Hired: Six Months Undercover in Low-Wage Britain’, revealed workers forwent bathroom breaks over the fear of being disciplined while warehouse security measures allegedly resembled prisons.

As a result, first-hand accounts collected by survey worker rights platform ‘Organise’ at the time reported that 55% of workers suffered depression since working at Amazon and over 80% said they would not apply for a job at Amazon again.

In 2022 Amazon warehouse staff in Tilbury staged a walkout over a 35p an hour pay increase offer, having lobbied for a £2 increase. More recently Amazon workers in Coventry and Birmingham have staged strikes over pay amid the ongoing cost-of-living crisis, becoming the first ever employees of the online retailer in the UK to take strike action.

Meanwhile, GMB Union recently won a formal recognition ballot which required proof that more than 50% of Amazon’s staff are now members. This is a significant development because it’s the first-time workers at a UK Amazon site have won trade union recognition meaning Amazon will now have to sit down with GMB on matters related to pay, hours and holidays. These discussions have only previously been achieved in the US.

GMB Union has also filed legal proceedings against Amazon over alleged attempts to coerce its staff members to cancel their trade union memberships. This is an Inducement claim and allows workers to challenge employers who offer an inducement to forego their collective bargaining rights.

Whilst Amazon deny the claims, GMB has described union representatives experiencing bullying and intimidation, anti-union messages and QR codes directing members to cancel their membership being displayed within the workplace, and workers forced to attend hour long anti-union seminars.

GMB organiser Rachel Fagan said: “Amazon bosses may have hoped this campaign would fade away, but instead union membership at Amazon has exploded as more and more workers are standing up to demand Amazon listens. When Amazon are ready to listen, the message they’ll hear is simple; £15 an hour and union rights for UK Amazon workers.”

Amazon announced a pay rise for its warehouse workers in March 2024 meaning minimum pay has risen by 10% in the past seven months. This puts it ahead of the legal minimum wage for those aged 23 or over, which will be £10.42 an hour from April.

As economic pressures subsist and with more than 30 warehouses in the UK, it seems likely Amazon will continue to face internal pressures. We will keep you posted …

Last month, we briefly looked into rising food prices in light of climate change. This month we dig a little deeper…

Speaking on this topic, Waitrose’s boss James Bailey blamed climate change on rising food prices and warned that the cost of groceries will increase after announcing that all its meat, eggs, milk, fruit and veg will be sourced from ‘regenerative farms’. Bailey said: “I think we’re seeing the end of the era of cheap food, because of the impact of that cheap food – not just on people’s health but the external impact, the environmental impact, the societal impact of that cheap food.“

What is regenerative farming?

Regenerative farming is a philosophy centred around protecting and enriching the soil to increase yield and has deep roots in farming and Indigenous communities across the globe. The Maya people and Iroquois favoured a technique called ‘intercropping’ (where compatible crops are grown together) which cultivated the ‘three sisters’ (beans, corn, and squash). This improves biodiversity by fostering a symbiotic relationship between the plants, soil microorganisms, insects, and animals. The Lenca people in Honduras practise agroforestry; the concept of growing crops in a way that mimics the forest and offers shade and nutrients.

Albeit not a new concept, in 2017, Regeneration International provided this definition within the context of climate change:” ‘Regenerative Agriculture’ describes farming and grazing practices that, among other benefits, reverse climate change by rebuilding soil organic matter and restoring degraded soil biodiversity – resulting in both carbon drawdown and improving the water cycle.”

Climate change is increasingly driving the need for holistic land management. Governments, farmers, consumers, and corporations are grappling to strike a critical balance between environmental sustainability, profitability, production, and development. Added geopolitical factors such as disruption in supply chains caused by Russia’s invasion of Ukraine and the Red Sea Crisis have added another layer of instability to the UK food security.

There is growing pressure to source food in a more sustainable way. However, there is a huge opportunity for retailers to maximise the opportunities that can come from nature-based solutions to climate change including partnerships with sustainable land use projects. With Waitrose supporting more than 2,000 of its suppliers to move to nature-friendly farming practices, Bailey explained: “We need to witness the end of cheap food and a reversal of the value of the food people are eating.”

On 6 May one of the biggest nights in fashion took place, the Met Gala. The dress code for this year’s annual gala, “The Garden of Time”, is a reference to the Costume Institute’s new exhibition, “Sleeping Beauties: Reawakening Fashion”.

The theme is based on J. G. Ballard’s 1962 short story, which centres around an elegant couple living on borrowed time in a luxury residence, surrounded by a garden of crystal flowers. To keep an angry mob from advancing upon them, the couple must pick the flowers, one by one, to allow them to briefly pause time until all the flowers are gone and there is no time left.

Interestingly, some consider the story to be a metaphor for the evolution of human history and the endless cycle of creation and destruction.

Given that fashion is one of the world’s most resource-intensive industries, contributing to more than 10% of global carbon emissions, on-lookers may find the theme quite ironic. Even more so as many of the attendees wore outfits that celebrated nature, adorned with flowers, birds and insects. Yet if you took a closer look, you would see that many of the gowns and suits used non-sustainable decorations, such as sequins, or strong materials that do not ‘wither away’. Michelle Gabriel, graduate program director of sustainable fashion at GCNYC notes that “inordinate water, chemicals, and raw materials are used to produce one gown, and significant emissions are produced at each stage of production from dyeing to processing to cutting and sewing”.

The Met Gala has faced controversy before, with climate change protesters delaying the entrance of several celebrities in 2023. Given the influence of the stars that attend and the high-profile nature of the event, the Met Gala could lead the way on sustainability and be a platform for change.

In an interesting move, Camila Cabello accessorised with a ‘clutch bag’, made from a block of ice – potentially a nod towards the melting polar ice caps, or maybe just a fashion statement, who can be certain. However, there were several designers and celebrities who took a clearer stance:

• Amanda Seyfried displayed a Prada gown made of fabric repurposed from the designer’s 2009 spring collection.
• Charli XCX wore a Marni gown made from upcycled vintage worn-out T-shirts.
• Penélope Cruz’s gown was stitched together from three different Chanel couture dresses from the 1940s, 1950s and 2020.
• Demi Moore dressed in a Harris Reed gown made from vintage wallpaper.
• FKA Twigs, Ed Sheeran and Cara Delevingne sported sustainable bespoke collections from a collaboration between lab-grown jeweller Vrai and Stella McCartney.

Although it may have only been a handful of attendees that wore repurposed outfits, it does signify a shift in the world of fashion. Social pressure and stigma is growing and one can only hope that more celebrities and designers take note.

We will have to wait and see what the 2025 Met Gala brings.

In this article, we address Sports Direct’s quest to sell the new Newcastle United kit in their stores and explore the impact of restricted supply agreements on retailer competition.

As the 2023/24 English football season has concluded, Arsenal fans are not the only ones feeling a bit defeated. On May 17^th, Sports Direct (“SD”) had their bid to stop Newcastle United’s exclusive kit supply with arch rival sporting giant JD Sports for the 2024/25 season rejected by the Court of Appeal.

The retailer, part of Frasers Group plc and owned by British billionaire Mike Ashley, had originally filed a claim under the Competition Act (the “Act”) in an effort to stop the club “abusing market position” by preventing the retailer from selling kit. SD’s lawyers argued that preventing the “home of football supplies” from selling cheaper shirts would harm fans, but Newcastle United said there was “no evidence” competition would be damaged. The Competition Appeal Tribunal (the “Tribunal”) refused to grant an initial application for interim injunction on the grounds that there was no serious case to be tried, and SD appealed the decision.

The Court of Appeal has now rejected the appeal, with Sir Geoffrey Vos noting that “the tribunal was right to think that, though damages would not be an adequate remedy for either side, the balance of convenience favoured refusing interim relief and ordering a speedy trial.” Having failed to obtain an interim order at the Tribunal and again at the Court of Appeal, both parties will now proceed to what is likely to be a hard-fought trial.

Abuse of dominant market position contrary to Chapter II

SD’s claim centres on the argument that Newcastle Football Club occupies a “dominant position on the market” for the wholesale kit supply, having reserved the distribution rights to the replica kit in the UK exclusively to itself as part of an agreement with Adidas. SD then asserts that the club has abused this dominant position by entering into an exclusivity agreement with JD Sports to supply them with Newcastle United’s replica kit, essentially foreclosing SD from being able to stock and sell the valuable kit. SD argues this is contrary the Chapter II prohibition of the Act, and has a material effect on downstream competition to the detriment of consumers.

Breach of Chapter I prohibition

The claim also alleges that because refusal to supply kit to SD was the “necessary result of exclusivity arrangements” contractually in place between JD Sports and/or Adidas, any such agreements would be in breach of the prohibition in Chapter I of the Act and therefore void. This chapter prohibits agreements that have as their object or effect the restriction, prevention or distortion of competition in the UK.

SD’s Claim

In respect of these two allegations, SD seeks an injunction restraining the club from engaging in and/or implementing the arrangement, damages, interest and costs. It’s also claimed that replica kits are vital for SD to attract shoppers and, by not supplying them with 50,900 units of the Newcastle merchandise, the retailer will be losing out on profits equating to £1.5m. Furthermore, the replica kit of a specific club contributes to the retailer’s goodwill and reputation with supporters of that club, and vice versa, SD’s brand and reputation will suffer with supporters of a club whose kit they do not stock.

The club has licensed the manufacture and distribution of the replica kit to an entity called Castore since the 2020/21 season. Throughout that period, SD argued, Castore had consistently supplied SD with replica Newcastle kit without interruption, and they had “every expectation” that the supply would continue.

Appeal Decision

Although Sir Geoffrey Vos dismissed SD’s appeal for interim relief, he did believe (contrary to the Tribunal) that they had successfully established a serious case to be tried, noting that there were ‘important questions about the definition of Market and Newcastle United’s dominance, and whether SD were right to say that the question of abuse of dominant position should be considered from the standpoint of existing [third party] suppliers’. Therefore, we expect a hard-fought case which will shed further light on how courts determine the anti-competitiveness of exclusive distribution agreements.