Morrisons signs new supply agreement with delivery giant
SUPERMARKET Morrisons has announced a new supply agreement with Amazon, and is expanding its geographical reach after redefining its Ocado agreement.
“Hundreds” of Morrisons products will be made available to Amazon Prime Now and Amazon Pantry customers.
Morrisons will deliver a wholesale supply service to Amazon for ambient, fresh and frozen products.
The Bradford-based supermarket chain has also been in talks with Ocado to grow Morrisons’ online presence, with space being taken at Ocado’s fulfillment centre in Erith in the South.
The Erith fulfillment centre is due to go-live at the end of 2017 and is expected to have capacity of 210,000 orders per week.
This will enable Morrisons to expand across the UK. The grocer said it would only proceed it it enables it to achieve profitable growth online.
Analysts predicted that the deal with Ocado would be revised under the leadership of chief executive David Potts, which sees Morrisons’ groceries being delivered to Ocado warehouses, then out to customers.
Online supermarket Ocado warned Morrisons late last year that setting up their own online service would be a breach of their 25-year contract.
It said: “There can be no certainty that an agreement will be concluded.”
David Potts, chief executive at Morrisons said: “Today’s agreement is built on Morrisons unique strengths as a food maker. The combination of our fresh food expertise with Amazon’s online and logistics capabilities is compelling.
“This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business. We look forward to working with Amazon to develop and grow this partnership over the coming months.”
Tim Steiner, chief executive of Ocado, said:”We are delighted to have reached an in principle agreement with Morrisons. This is a win-win arrangement which allows both of us to grow faster, and more profitably, in a grocery market where channel shift is now an unquestionable reality.
