Strong sales at Amazon push down losses

Online retail giant Amazon.com has reduced its losses further than expected after revenues leapt by 28% thanks to the popularity of its free delivery offer and strong sales in the UK and Germany.

Amazon, the biggest retailer on the web, said first quarter losses had narrowed to £6m compared with more than £14m a year ago.

The first quarter of the year, following the Christmas rush, is traditionally the weakest for retailers.

The retailer of books, music, electronics and other goods said international sales had increased by 68% in the first quarter compared with last year and Amazon was well on its way to meeting its targets.

"Almost two years ago we set ourselves the aspirational goal of making sales outside the US 50% of the total by 2005 and we've already reached 41%," said the Amazon UK managing director, Robin Terrell.

Overall revenues rose to £680m from £531m in the first quarter of last year, a record outside the Christmas period.

For the full year Amazon said it expected sales to grow by more than 19% to £2.95bn and operating income to increase by more than 50% to £173m.

Mr Terrell said the hype surrounding the latest Harry Potter book, which the site will sell at half price, would help ensure growth continued into the second quarter.

"In the next quarter we've got some great things to look forward to. We took more than 30,000 orders for the new Harry Potter book within the first 24 hours," he said.

"But outside specific product launches we're going to continue to try to offer as much of a selection as possible."

Last month the site added home and kitchenware to its range of products and Mr Terrell said it would continue to diversify into new areas.

"We will continue to build our selection so we can offer anything," he said, adding an increasing number of items would be offered through deals with third parties.

Mr Terrell said that, as customer numbers continued to grow, Amazon would be able to continue to make a profit on discounted items by ordering in bulk.

He added the free shipping offer for orders over £35, which was introduced last Christmas, would be extended indefinitely.

"We consider it to be a long term investment in our customers," he said.