Amazon Prime announces upcoming price increase for Irish customers

Amazon Prime will raise the price for the first time in years and Irish customers are expected to see a significant increase in their membership fees.

or Irish customers with an annual subscription to the delivery and streaming service, their bill increases by 30 pieces from €69 to €89.90.

Customers who chose to pay the monthly fee of €7.99 are now paying €8.99 – an increase of 12.5 percent. Your bill will now be almost €108 annually.

Amazon announced the price increase on Monday, days before the online retailer reports quarterly financial results.

Amazon cited “increased inflation and operating costs” as well as faster delivery and more content to stream in statements about the price hikes, which were the first for some countries since 2018.

“We will continue to work to ensure Prime offers members exceptional value,” it said in a statement.

The price hike Amazon announced for Prime in the United States in February reflects mounting pressure from Wall Street on new chief executive Andy Jassy to shore up earnings as inflation rises and a downturn threatens.

For buyers in Germany, Amazon’s second largest market after the US, annual Prime membership fees will also increase by 30 percent to €89.90. The retailer’s third-largest market, the UK, will rise by 20 per cent to £95 per year, while Amazon sites covering Spain, Italy and France will charge Prime members between 39 per cent and 43 per cent more per year.

The changes will take effect from September 15th when members join or next time they renew.

In April, Amazon posted its first quarterly loss in seven years on headwinds including higher wages, rising gas costs and an unrealized loss on its stake in Rivian Automotive Inc. In the second quarter, the value of that investment fell by an additional $4 billion. Ford Motor Co, also a Rivian investor, recently sold part of its stake.

Amazon said it remains committed to working with Rivian, “a key partner” that will help it get thousands of electric delivery trucks on the road across the United States in 2022.

According to Refinitiv IBES data, analysts on average expect $1.38 billion in net income when Amazon reports results on Thursday. This week, Walmart Inc. warned its profit would fall more-than-expected in 2022 as higher fuel and grocery prices prompted consumers to ease discretionary spending.

After generating record operating profits from home shopping during the pandemic, Amazon is now on a cost-cutting program. It hasn’t filled roles at some warehouses, halted construction of large office lots in Bellevue, Wash., and slowed warehouse openings while leases expire.

It has also increased prices for some merchants selling on its platform. In May, Amazon imposed an average fuel and inflation surcharge of 4.3 percent on sellers who store and ship their products in key European markets, after similar action in the United States.

Analysts worry that a downturn could slow a key earnings engine for the company, its Amazon Web Services (AWS) cloud division.

“AWS revenue is more exposed than (cloud rival Microsoft Corp.) as a larger portion of customers are in the startup space that is under pressure,” Bernstein Research said in a recent note.

How much the Prime increases will offset costs was unclear. After months of increases in the US, the percentage of shoppers who were Prime members for a year has increased, Baird Equity Research’s Colin Sebastian said after Amazon’s Prime Day event.

While the July marketing blitz was “no slouch,” he said, “there is less churn than feared due to higher membership costs.”

With additional coverage from Reuters.

https://www.independent.ie/business/technology/news/amazon-prime-reveals-price-hike-for-irish-customers-coming-soon-41867796.html Amazon Prime announces upcoming price increase for Irish customers

Fry Electronics Team

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