Jeffrey Dastin, Arriana McLymore, Lisa Baertlein

LOS ANGELES, (Reuters) – Amazon.com Inc. (NASDAQ:) has delayed its plan to offer one-day delivery for Prime members. This will delay its efforts to consolidate its lead in ecommerce. It also sends costs higher than usual ahead of the holiday season.

These comments come at a time when staffing is a major pain point for U.S. retail stores, who already face supply-chain snarls and product shortages.

Amazon, a Seattle company, said that it expects to spend $4 billion more in labor and other expenses for the fourth quarter. This is due to pandemic-fueled shortages, which made it difficult to hire drivers and warehouse workers, forcing Amazon to send packages to warehouses further away with adequate staffing.

Amazon, which announced one-day delivery to Prime subscribers in April 2019, said it was spending $800 million on the service alone for the second quarter 2019. The race to deliver faster forced Walmart (NYSE 🙂 Inc and other retailers, to invest in ecommerce and speed delivery. This helped to boost competition.

Amazon charges $119 per year for Prime Membership in the United States. This includes shipping.

Brian Olsavsky, Amazon’s Chief Financial Officer, stated that “unfinished business” remains on the 1-day-promises side. “We were ramping it up nicely in 2019 as well as in the first quarter in 2020 prior to the pandemic,” Olsavsky said. He was referring specifically to one-day shipping. We are not yet back at the levels we had before the pandemic.

Olsavsky acknowledged that the labor market has not been able to close the gap for Prime customers who are limited in their ability to receive one-day shipping. But, Olsavsky expressed hope for an improvement over the next year.

“CAN’T CONTROL IT”

Amazon faces stiff competition as shoppers re-spend on entertainment and travel.

Wedbush Securities analyst Michael Pachter said that Amazon couldn’t afford to not pay for employees because the company needs high-cost warehouses to deliver goods quickly to customers nearby.

He stated that “their sales are located in population centers which by and large implies they’re being forced to pay competitive wages.” They can’t really control it. You can order from Amazon to receive it quickly.

Companies across the retail landscape also are struggling to find workers to do physically demanding warehouse work – especially as restaurants, stores and entertainment venues rehire. In New York City, some Amazon warehouse workers https://www.reuters.com/business/amazons-staten-island-warehouse-workers-file-petition-union-election-nlrb-2021-10-25 are pushing for more pay and protections through a potential union vote.

Also, drivers are in high demand.

Three Amazon DSP drivers told Reuters this week that they have been awarded higher wages by their Amazon partner. FedEx (NYSE 🙂 offered two drivers a second chance to get more from their DSP employers. Another driver leapt to United Parcel Service (NYSE:), union shop that is known for offering the best benefits and pay in the sector.

Amazon has previously stated that it will add 150,000 seasonal positions in the United States. The lures of warehouse workers include a starting salary of over $18 an hour, sign-on bonuses up to $3,000 and a range of other jobs.