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The ‘growth of online retail’ is now so proverbial that the phrase itself is nearly redundant. Is anyone surprised to learn this morning that Amazon has absolutely rampaged through the Christmas retail season, while scores of well-known bricks-and-mortar retailers reported a torrid set of financial results for the same period? No, me neither.
So, let’s get down to brass tax. The behemoth’s sales rose 21% in the three months ending on New Years Eve, to $87.4bn, or about £66.5bn. Profits were in the order of $3.3bn, compared with $3bn during the same period the previous year.
A few factors are at play in the firm’s performance. Firstly, founder Jeff Bezos has been driving massive investment – billions of dollars of it – into achieving one-day delivery as the standard offer for members of Amazon Prime.
These members currently get free delivery on everything that is sold under the Prime banner, but the aim is to make everything on Amazon eligible for this benefit. Prime members also get access to the firms Prime Video streaming service, which is a competitor to Netflix, and now produces dozens of its own shows under the Amazon Originals brand.
Bezos says Prime now has 150 million members worldwide. It costs about £95 in the UK per year and $129 in the United States, so some fag-packet maths tells us that the firm is raking in something like £14bn in revenue from those members each year before shipping them a single item.
This is a quite incredible membership scheme, and must represent one of the most subscribed-to paid-for services in the history of private enterprise, surely?
Another ‘little’ factor in the success of the ‘everything store’, is that its cloud computing services division, Amazon Web Services, also grew massively, up 34% compared with the same period in 2018, to $9.9bn.
Anyway, Amazon’s stock rose a massive 10% in after-hours trading following the announcement last night, driving Bezos personal wealth some $13.2bn higher in the space of minutes.
Norton motorcycles snafu takes everyone on a wild ride
I’m going to tread carefully on this story, since it has only just broken in the Guardian and I do not have the luxury of a big legal team sitting in wait to tackle any incendiary prose issuing dangerously from my desk. But it looks as though something is up at Norton Motorcycles, the iconic British brand which has just gone into administration on Wednesday.
On the face of it, Brexit, a £300,000 tax bill and international competition have combined with, well, allegedly fraudulent use of pension funds. Apparently around 228 people had £14m of their savings invested in the firm and many had been trying to get it out for years.
It gets a little juicier, because it turns out there were government-backed loans in there, ministers like George Osborne endorsing the company back in 2015, oh and of course, long waiting lists for actual motorbikes many of which have been paid for in full.
We will leave it to the Guardian to explain the rest of the story to you. It’s their scoop after all.
