// Amazon reveals a 17% hike in Prime membership fee to offset rising costs as profits surge
// Amazon previously flagged that it expected higher costs to dent sales growth in its core Christmas quarter
Amazon has reported a rise in sales and profits over the Christmas quarter and revealed it is to raise the cost of its Prime membership for customers in its core US market to offset rising costs.
The online giant posted a rise in net sales of 9% to £101.1bn in the quarter to December 31, 2021.
Net income doubled to £10.5 billion in the period, however operating income fell to £2.6 billion from £5.1 billion the previous year.
Amazon said the annual fee for its 200 million US members, which covers shopping deliveries and its streaming service, would go up for the first time in four years from $119 currently to $139 – a rise of almost 17%. The company made no mention raising Prime prices in the UK. The
The US price rise will come into force next month.
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The price increase came as Amazon chief executive Andy Jassy flagged rising costs and continued Covid uncertainty.
He said: ”As expected over the holidays, we saw higher costs driven by labour supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic.”
Net income during the final quarter of its financial year, which includes Black Friday and Christmas, almost doubled to $14.3bn compared to the same period last year despite a slowdown in revenue growth.
Amazon’s quarterly growth was also boosted by earnings from its web services business, which were up 40% year on year.
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