Amazon Blames Inflation for Prime Subscription Hike in UK and Europe

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Amazon Blames Inflation for Prime Subscription Hike in UK and Europe
Credit: © Reuters

(Bloomberg) -- Amazon.com Inc (NASDAQ: AMZN ) said it’s increasing the cost of its Prime subscription in the UK, Germany, France, Spain and Italy as a result of inflation and associated operating costs.

The annual price of the free-shipping service will increase to £95 ($114.06) from £79 in the UK starting from Sept. 15, the company said in a statement on Tuesday. Prices will jump by 31% on average across the affected European countries and follows similar hikes in the US announced in February.

“From what we have seen in the United States, there has been no opt-out phenomenon because more and more services are being provided via Prime and this service still allows consumers to make extremely significant savings,” an Amazon spokesperson said by phone.

In April, Amazon told investors a pandemic-fueled hiring and warehouse-building binge was catching up to it as e-commerce sales growth inevitably slowed from the torrid pace of the coronavirus outbreak. Fuel and labor costs were already biting, and soaring inflation has only continued since. 

The company isn’t alone in raising its prices, however. Companies including Netflix Inc (NASDAQ: NFLX ) increased the cost of its packages this year, sandwich chain Pret A Manger hiked the cost of its subscription, and Britain’s phone companies are rolling out their biggest price increases in years.

Amazon’s annual Prime subscriptions will jump from 69 euros ($70.121) to 89.90 euros in Germany, from 49 euros to 69.90 euros in France, and from 36 euros to 49.90 euros in Spain and Italy, the company said. 

 

 

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© Bloomberg. An Amazon Prime Air aircraft at the company's Air Hub at the Cincinnati/Northern Kentucky International Airport (CVG) in Hebron, Kentucky, U.S., on Monday, Oct. 11, 2021. Tech shares outperformed after a report showing a faster-than-expected increase in consumer prices last month lifted companies best able to handle those price pressures. Giants Microsoft Corp. and Amazon.com Inc. led gains in the tech-heavy Nasdaq 100, Photographer: Jeffrey Dean/Bloomberg

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