Amazon hit by slowest growth in two decades

Separately, Apple surprised investors with better-than-expected figures

Amazon has suffered its slowest growth for two decades, knocking $150bn (£120bn) off its value on Thursday, as the pandemic internet shopping boom ground to a halt.

The online retail giant said revenues rose by 7pc in the first three months of the year to $116.4bn. This was the slowest growth since 2001, in the aftermath of the dotcom bubble.

It also revealed its first loss since 2015, as costs soared and it took a heavy hit on its investment in the electric carmaker Rivian.

Shares fell almost 10pc in after-hours trading as the company issued disappointing forecasts for the next quarter. It said sales could grow by as little as 3pc, well below Wall Street forecasts.

Amazon is grappling with rising cost of fuel and shipping, as well as higher wages and supply constraints due to shutdowns in China. It has warned investors to expect lower profits as it grapples with costs.

The figures come amid questions over the sustainability of the online shopping boom as economies continue to reopen.

Internet sales accounted for 26.1pc of all UK retail spending in March. This was the lowest level since March 2020, when the first coronavirus lockdown was introduced and down from a peak of 37.8pc in January 2021.

Sales were boosted by growth at Amazon’s cloud computing division AWS, as well as higher advertising revenue. Its core online retail business, which accounts for almost half of revenues, suffered a 3pc drop.

The company posted a $3.8bn loss, compared with an $8.1bn profit a year ago. It took a $7.6bn writedown on Rivian, whose shares have plummeted since the electric carmaker’s blockbuster US flotation in November.

Amazon’s slowdown in growth poses a challenge for Andy Jassy, the company’s chief executive, who took charge from founder Jeff Bezos last summer.

Mr Bezos, the world’s second-richest person, had run Amazon since the company was founded in 1994 and remains in place as executive chairman.

Mr Jassy said: “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges.” He said the company would be seeking to save costs “as we work through ongoing inflationary and supply chain pressures”.

Amazon suspended all shipments to Russia and Belarus in March and said it would no longer accept new merchants from the countries seeking to sell goods to customers.

The company did not have a large operation in the countries, but customers were able to order items to Russia from overseas versions of the website.

Separately, Apple revealed its slowest quarterly growth for almost two years, although the company surprised investors with better-than-expected figures.

The Silicon Valley giant posted revenues of $97.3bn, a 9pc rise, and said profits rose 6pc to $25bn.

While this was its third-biggest quarter ever by sales, it was the weakest growth the company had recorded since the autumn of 2020, when pandemic supply chain hold-ups delayed the release of its new iPhones.

Apple has recently been hit by Covid lockdowns in China, which have interrupted production at plants in Shenzhen and other cities.

Shares rose by around 2pc in after-hours trading as the company raised its dividend and said it would return $90bn to shareholders through share buybacks.