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Amazon Does 'Great Damage' to Retailers, Trump Tweets

Amazon Does 'Great Damage' to Retailers, Trump Tweets

By Giles Turner, Bloomberg | Updated: 17 August 2017 13:42 IST

Highlights

Trump said Amazon is hurting other retailers
Trump is losing the support of many company executives
Amazon recently pledged to hire more than 100,000 workers by 2018

President Donald Trump once again unloaded on Amazon, tweeting that the company is hurting other retailers and implying that it's killing industry jobs across the US.

Amazon is causing "great damage to tax paying retailers," Trump said in a Twitter post Wednesday, causing shares in the online retailer to fall as much as 1.2 percent in early trading.

"Towns, cities and states throughout the US are being hurt - many jobs being lost!" Trump said in the tweet.

Trump is losing the support of many company executives, some of whom resigned this week from a council of business leaders to protest the president's response to the violent demonstrations in Charlottesville, Virginia. But he has often taken particular aim at Amazon and The Washington Post, owned by Amazon founder Jeff Bezos, for its coverage. The Post is in a business partnership with Bloomberg News.

While it's unclear what prompted Trump's tweet, which seems to be taking on two issues - taxes and jobs - The Washington Post ran a scathing editorial Wednesday about Trump in the paper, and there were also pro-tax reform advertisements that ran on early morning talk shows.

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It's often difficult to parse Trump's tweets, but he seems to be focusing partly on how Amazon's sales and market share growth is hurting the traditional retail industry. His remarks come amid one of the most tumultuous years in the industry's history. Brick-and-mortar chains, especially apparel sellers, are suffering from sluggish mall traffic and an exodus of shoppers to e-commerce.

A rash of chains have filed for bankruptcy this year, including Payless, Gymboree, HHGregg and RadioShack. And the biggest department-store companies, such as Macy's, Sears Holdings and J.C. Penney, are shuttering hundreds of locations. The total number of store closings is expected to hit a record in the US this year, with Credit Suisse Group analyst Christian Buss estimating that the number could exceed 8,000.

On the other hand, Amazon is hiring rapidly. The online behemoth has pledged to hire more than 100,000 workers by 2018 and has been holding job fairs all over the US In some cases, fired department store workers are ending up at Amazon fulfillment centers.

In his tweet, Trump also hammered Amazon again on tax-related allegations. It's unclear exactly what he means since the company has been opening distribution centers everywhere and now collects sales tax in each state that has one.

In June, Trump posted a tweet attacking "AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes."

In December 2015, Trump also described The Post as a tax shelter that Bezos uses to keep Amazon's taxes low. Without these arrangements, Trump argued, Amazon's stock would "crumble like a paper bag." Bezos actually owns The Post via a holding company separate from Amazon. Amazon did not respond to a request for comment.

Amazon has been battling a number of politicians from both the U. and Europe about its stance on tax. In the US, Amazon previously fought to only collect sales taxes for purchases in states where it doesn't have a physical presence. Now it has a legion of distribution centers and collects sales tax in every state that has one.

The US retailer is currently fighting the European Union over its tax bill, while in March it won a $1.5 billion tax dispute with the IRS.

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