Amazon Prime customers in the United States will start paying significantly more for their membership from next month, the first time they have done so since 2018.
In a press release on Thursday the company said it has invested heavily in Prime in recent years, providing customers with more products, exclusive deals and discounts, and fast and free unlimited shipping.
“Since 2018 in the U.S., availability of Free Same-Day Delivery has expanded from 48 metropolitan areas to more than 90, items available for Prime free shipping have increased over 50 percent and members have saved billions of dollars shopping Prime Day,” Amazon said.
“This is all on top of new program benefits like prescription savings and fast, free delivery from Amazon Pharmacy and the continually growing Amazon Music for Prime members, Prime Reading, and Prime Gaming.”
However, “the continued expansion of Prime member benefits as well as the rise in wages and transportation costs,” means the company is upping prices.
In February, an annual membership will increase by $20 from $119 to $139 and the monthly fee will go up by $2 from $12.99 to $14.99, the company said.
For new Prime members, the price change will go into effect on Feb. 18, while it will change after March 25, for current prime members.
The announcement comes as inflation levels have risen to a 40-year high of 7 percent in the United States, driving up prices for both consumers and businesses.
Meanwhile, a nationwide labor shortage exacerbated by the COVID-19 pandemic saw many businesses raise employee wages, and implement attractive bonus schemes and competitive compensation in an effort to pull in new workers.
Last year, Amazon raised its average starting wage in the U.S. to more than $18 an hour.
Elsewhere in Thursday’s press release, Amazon also announced financial results for its fourth quarter of 2021, which ended on Dec. 31.
The company made $14.3 billion in net income in the fourth quarter of 2021, compared with $7.2 billion in the fourth quarter of 2020.
However, its operating income dropped in the fourth quarter of 2021 to $3.5 billion in 2021 compared with $6.9 billion in the fourth quarter of 2020.
The company forecasted net sales to be between $112.0 billion and $117.0 billion, or to grow between 3 percent and 8 percent for the first quarter of 2022 compared with first quarter 2021, a huge decline from the nearly 44 percent growth in sales it posted during the same period a year earlier.
“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron. Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic,” Amazon CEO Andy Jassy said in a statement.