THERE were further signs shoppers are shunning the high street yesterday as the world’s biggest online retailer reported soaring Christmas sales.
Seattle-based Amazon said global sales, including those in the UK, jumped 20 per cent to $9.09bn (£5.8bn) in its fourth quarter and demand for its own Kindle Fire tablet computer took its total revenues for the crucial holiday quarter up 22 per cent to $21.27bn (£13.5bn).
The strong sales performance will heap further pressure on the group over its tax affairs.
Amazon public policy director, Andrew Cecil, was hauled before MPs, along with executives from coffee chain Starbucks and internet giant Google, in November to explain how their companies manage to pay little or no corporation tax on their UK operations.
Net income at the group was 45 per cent lower at $97m (£61.6m), pushed down by investment in the group’s distribution network and its Kindle business in the three months to December 31.
The group said its best-selling item was the Kindle Fire which has a touch-screen and can stream films from the internet.
It also said its selection of TV shows, songs, magazines, books and audiobooks and popular apps had risen from 19 million in 2011 to 23 million in 2012.
Amazon founder and chief executive, Jeff Bezos, said: “We’re now seeing the transition we’ve been expecting. After five years, electronic books is a multi-billion dollar category for us and growing fast – up approximately 70 per cent last year.”
For the current quarter, Amazon expects revenues of $15-16bn (£9.5-10.5bn). Analysts had forecast revenues of $16.86bn (£10.7bn).
Revenues, along with guidance for the current quarter, missed Wall Street’s expectations but investors still sent the world’s top online retailer’s stock up more than 10 per cent in after-hours trading.
“It boggles the mind,” said BGC financial analyst Colin Gillis, who attributed the stock price jump to slightly stronger-than-expected operating income.
“A lot of people scratch their head at the valuation given to Amazon and the support the stock has.”
The strong performance from Amazon comes as January trading updates and official figures have already shown that retailers with a strong internet offering had the strongest Christmas as people turned to smartphones and tablets and used click and collect services.
High street businesses which failed to adapt so well, such as HMV, Blockbuster and Jessops, called in the administrators this month.