Weak pound boosts Amazon UK

By THIS IS MONEY
Updated: 07:51 EST, 24 April 2009

Online retailer Amazon UK today reported a surge in exports as consumers in continental Europe took advantage of the weak pound.

Flying out: Purchases from the Continent have been keep Amazon UK healthy

The trend, reported by UK managing director Brian McBride, emerged as Amazon UK's parent company posted a 24% rise in first quarter earnings to $177m (£121.7m).

The Seattle-based firm does not break out figures for the UK, but in the international division sales rose 15% to $2.31bn (£1.59bn) in the first three months of this year.

Top sellers in the UK included Mamma Mia! The Movie, which became Amazon.co.uk's biggest selling product of all-time, overtaking the seventh book in the Harry Potter series. James Bond film Quantum of Solace was the biggest seller of the quarter, while three books by Stephenie Meyer also appear in the top 10.

Mr McBride said sales growth was seen across its sales departments, including in music after downloads from its new MP3 store exceeded fivem tracks. Amazon has sparked a price war in the sector by offering a number of best-selling albums for £3 as well as chart-topping tracks from 29p.

Mr McBride added: 'With the weakness of the pound we are seeing exports rising - a lot of people are buying products from Europe in the UK.'

Amazon is celebrating its 10th year in the UK, where it launched its first overseas operation. The business has four warehouses in Glasgow, Fife, Bedfordshire and most recently Swansea, where it opened its largest centre to date last year, at more than 800,000 square feet of storage space with some 1,000 staff.

It hired about 2,000 temporary workers over Christmas to help it cope with the peak selling season.

Today's results from the global company were much better than the decline analysts were expecting and indicate that the online retailer is faring well despite the ongoing recession.

• Microsoft boss Steve Ballmer said today that the company expects to have to deal with a weak economy for at least the next several years.

'We are planning essentially for the economy to contract,' Ballmer said in a speech in Cologne today. 'That may take two, three, four years, partly depending on government policy to ease some of the pain. Then we will see growth again.'

The comments came the day after Microsoft revealed that its quarterly revenue fell from the previous year for the first time in its 23-year history as a public company, while its profit dived 32%.

The declines illustrated the toll the recession has taken on the world's largest software maker, even though Microsoft remains one of the richest and most profitable companies.

In January, Microsoft said it needed to resort to its first mass lay-offs, cutting 5,000 jobs, and on Thursday it announced it would do away with merit pay increases for employees in the next fiscal year.