Amazon Prime Day arrives as company suffers slowdown in online sales growth
Amazon stock has dropped roughly 39% year-to-date
Amazon is heading into its annual Prime Day event on Tuesday amid a slowdown in online sales growth, although the company may see a boost given that the event this year comes just in time for back-to-school shopping.
The event has been used in the past to attract customers to Amazon's Prime membership, of which the cost has recently been raised from $119 per year to $139 per year.
Amazon total Prime Day sales are not disclosed, but growth estimates for last year’s event were in the 7% to 9% range.
After flourishing during the COVID-19 pandemic as people were largely stuck at home, Amazon in April suffered a rare quarterly loss. The company also revealed its slowest rate of revenue growth in nearly twenty years, which was 7%. Inflation had cost the e-commerce giant roughly $2 billion.
AMAZON UNION ORGANIZER SLAMS AOC FOR GOING 'RADIO SILENT' UNTIL THEIR VICTORY: WE DON'T NEED HER SUPPORT NOW
Amazon also said it had too many workers on its payroll and that it expects its extra warehouse capacity it added on during the pandemic amid soaring demand to total $10 billion in extra costs for the first half of this year.
In May, CEO Andy Jassy said Amazon was going to allow some leases to expire and defer construction on others. The company also had said it would sublease some of its warehouses.
This comes after Amazon nearly doubled its workforce in the last two years to more than 1.6 million people in an effort to keep up with pandemic demand. It had also increased its warehouse capacity to keep up with the high volume of orders for the time period. Amazon had leased and owned roughly 387.1 million square feet of space for its warehouses and data centers by the end of 2021. That number is more than double what it was in 2019.
AMAZON SHOPPERS MUST TAKE THESE IMPORTANT STEPS DURING THE HOLIDAYS
And after the pandemic spike in online retail sales growth in the U.S., which rose to 36.4% in 2020, the retail sector saw online sales return to more normal growth in 2021 and 2022. Growth came in at 17.8% in 2021 and 9.4% in 2022, according to Insider Intelligence.
The most recent retail sales figures from May revealed online sales dipped 1% while overall retail sales dropped 0.3% from April. June's numbers are scheduled for release on Friday.
AMAZON UNION COULD FACE A TOUGH ROAD AHEAD AFTER VICTORY
Amazon stock has also taken a turn for the worst this year, declining roughly 39% year-to-date.
CLICK HERE TO READ MORE ON FOX BUSINESS
The Associated Press contributed to this report.