Amazon UK to charge £1 more a month for Prime service from September

Amazon is to increase the price of its monthly Prime subscription service by 12.5% - or £1 - to £8.99 from September in the latest sign that delivery costs are rising.

The company said the cost of an annual Prime package, which includes unlimited deliveries for online shopping, access to its video and music streaming services and its Amazon Fresh grocery deliveries, would rise by more - 20%, or £16 - to £95, although this remains a discount on the monthly option.

Amazon said the rise in fees, which will be implemented as members' contracts come up for renewal from 15 September, was the first since 2014 and came after a series of improvements in its Prime service.

"We have increased the number of products available with fast unlimited Prime delivery, recently added ultra-fast fresh grocery delivery, and have significantly expanded our high-quality digital entertainment, including TV, movies, music, games, and books," a spokesperson said.

They added that Prime Video had tripled the amount of original Amazon content since 2018, with series including The Boys and The Terminal List, and UK-produced shows such as Clarkson's Farm and Backstage With Katherine Ryan. The service has also added access to Premier League football and Autumn Nations rugby in the UK and will launch The Lord of the Rings: The Rings of Power series in September.

Half of all UK consumers over the aged of 16 - or about 27 million people - are thought to have access to Prime as the service rapidly expanded during the pandemic, when high-street retailers were forced to close for long periods.

More than a third of UK over-16s, about 19 million people, are estimated to be individual members, up from 31% or 15 million in 2019, according to the market research firm Mintel. Prime membership peaks among younger consumers, with almost two-thirds (64%) of 16-34s now having access to the service.

Prime delivery is the most used service, but the video streaming service grew the fastest during the pandemic, with 62% of members regularly using it in 2020, according to Mintel. In contrast, just 7% used the Amazon Fresh grocery delivery service.

The price rise comes as online retailers and streaming services look for ways to offset inflation in delivery costs and growing difficulties with handling returned goods.

In March, Netflix said it was increasing the cost of its basic and standard plans by £1 a month to £6.99 and £10.99 respectively, while the premium tier will go up by £2 to £15.99. Apple Music is also increasing the cost of its student plan by £1 to £5.99, while the cost of Disney+ has risen by £2 a month to £7.99.

The price rises come despite evidence of waning interest in streaming services as households look for ways to reduce costs and find alternative entertainment now that the pandemic restrictions have ended.

The fast-fashion group Boohoo, which owns online brands including Debenhams, Dorothy Perkins, Oasis, Wallis and Burton, became the latest online retailer to start charging shoppers for returns earlier this month with a £1.99 fee.

Zara, Sports Direct and Next also now charge for the return of goods bought online as the costs of cleaning, checking and repackaging items, as well as deliveries, has soared.