Amazon.com Inc (AMZN.O) will raise fees for its delivery and streaming service Prime in Europe by up to 43% a year, the online retailer said, as it moves to counter higher costs days before it reports quarterly financial results.
The price hike, following one that 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 profit as inflation rises and a downturn looms.
It has increased prices for some merchants selling on its platform, too. In May, Amazon imposed an average 4.3% fuel and inflation surcharge on sellers storing and shipping their products in major European markets, following a similar move in the United States.
Analysts are concerned a downturn could slow a major profit engine for the company, its cloud division Amazon Web Services (AWS).
How much the Prime hikes will offset costs was unclear. Months into the U.S. increase, the percentage of shoppers who were Prime members for a year had grown, Colin Sebastian of Baird Equity Research said after Amazon’s Prime Day event. While the July Marketing blitz was “not a blow out,” he said, “there is less churn than feared from higher membership costs.”
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