Amazon sees profits and sales boost hampered by expenses rise

Online retailer currently facing lawsuit and UK union action
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Amazon.com has announced its financial results for Q1 2014.

The online retailer revealed that sales increased by 23 per cent to $19.74 billion (£11.75bn) during the period, compared with $16.07 billion (£9.56bn) in 2013.

Profits also saw an increase, rising by 32 per cent to $108 million (£64m), compared with $82 million (£48.8m) the year before.

However, the profit growth was somewhat negated by the company’s increased spending, which rose by 23 per cent from 2013 as the company invested in new distribution warehouses, new services including the Amazon Fresh food delivery offering and the Amazon Web Services cloud-based infrastructure.

The spending may continue to increase throughout 2014, as the Wall Street Journal reports that Amazon is also testing its own delivery network for the "last mile” – or the final portion of a package's journey.

According to the WSJ’s sources, delivery lorries driven by Amazon-supervised contractors are being trialled around San Francisco, Los Angeles and New York.

"We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start," said Jeff Bezos, founder and CEO of Amazon.com in a statement.

Discussing the popularity of the recently launched Fire TV streaming set-top box, Bezos said: “The team is working hard to keep Fire TV in stock”.

Bezos’ comments come as adult video network WREAL opens a lawsuit against Amazon over the Fire TV, which WREAL claims infringes upon its dedicated adult content streaming box – the ‘FyreTV’.

Further trouble could also be set to strike the UK arm of the retail giant, as GMB, the union for Amazon workers, is set to launch a public campaign for “decent pay and good jobs” at a new warehouse Amazon under development in Ashford, Kent.

This Ashford campaign will be part of an EU-wide push to ensure that Amazon “improves security of employment, treats workers fairly and pays them a wage they can live on in their distribution chain in the UK and elsewhere in the EU” said GMB.

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