The online retail giant has seen its sales slow during the first quarter of 2022, as the soaring traffic it enjoyed during the pandemic begins to dissipate. 

Amazon, which has posted strong growth in its online sales over the past few years, has forecast a -3% slip in its online sales during the first three months of the year. The retailer has also posted a net loss of $3.8b, largely thanks a loss of $7.6b on the value of its stake in the electric car manufacturer Rivian, which it invested in in 2019.

Shares in the online retail giant slumped -10% in extended trading on Thursday 28th April once the forecast, which largely trails analysts’ estimates, came to light. Amazon’s Q2 forecast continues in the same vein, suggesting growth in online sales of around +3% – a far cry from the double digit figures it’s achieved in recent years.

Elsewhere, the picture isn’t so bleak: overall sales are still increasing, up +7% year-on-year to $116.4b, powered by Amazon Web Services. Revenues from AWS are up +37% YOY, and advertising revenue is up +23%.

In addition to a slowdown in the number of consumers shopping online since the height of the Covid-19 pandemic, Andy Jassy, Amazon’s chief executive, has blamed rising costs and ongoing inflationary and supply chain pressures for the retailer’s poor performance so far this year. The Ukraine war was also cited in a statement.

To offset the macroeconomic challenges it’s facing, Amazon introduced a fuel and inflation levy earlier this month. “At a certain point, you can’t keep absorbing all those costs and run a business that’s economic,” said Andy Jassy at the time of the announcement. Sellers on Amazon UK may be forced to raise prices for customers after being hit with the 4.35% levy, which is being introduced to offset rocketing inflation and record fuel prices.

Amazon has also increased the price of its US Prime membership for the first time since 2018, and introduced a 5% surcharge for some US sellers.

Andy added: ““This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”