Regular consumers aren’t the only ones shifting more of their spending to Amazon.com.
The city of Atlanta, Denver public schools and the Mesa, Arizona, police department are among the 1,500 public organizations that since last year have signed new contracts to buy office supplies, books and even musical instruments directly from Amazon, according to a report released Tuesday by the Institute for Local Self-Reliance, a nonprofit group that advocates for strong local economies.
As The Washington Post reports, the contracts with Amazon could drive billions of dollars in public spending to the online giant in coming years, propelled in part by the ease of purchasing online. However, like in consumer retail, they risk penalizing independent retailers.
The local deals are part of a larger contract Amazon signed in January 2017 with U.S. Communities, a purchasing cooperative that negotiates contracts with suppliers on behalf of its members, which include a number of municipalities and government agencies.
The five-year contract, which can be renewed for up to 11 years, is valued at $500 million a year. Amazon already sells to tens of thousands of local governments and agencies, according to Amazon spokeswoman Lori Torgerson.
“As public dollars shift to Amazon and away from local independent suppliers or even national chains with local stores, cities are undercutting their own local economies,” sayd Stacy Mitchell, co-director of the Institute for Local Self-Reliance and a co-author of the report.
Mitchell says the new contracts also hurt national chains like Office Depot and Staples that have stores in some of the communities that also purchase from them. Amazon, which pays local taxes where required, maintains its contract continues to support small businesses.
