U.K.: Amazon to enter fresh food market with Morrisons tie-up
Morrisons has teamed up with online sales giant Amazon in a new supply arrangement where hundreds of fresh and frozen products will be available to order.
The supermarket announced yesterday that a large portfolio of its products would be available to Amazon Prime Now and Amazon Pantry customers in the coming months.
Britain's fourth largest supermarket, Morrisons will provide a wholesale service to Amazon in the U.K. and the deal is part of a strategy to strengthen its position and 'build a broader business that complements its supermarkets.'
"Today's agreement is built on Morrisons unique strengths as a food maker," says chief executive David Potts.
"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."
The announcement follows months of speculation about Amazon entering the fresh food market in the U.K. and elsewhere in Europe.
Earlier this month, Amazon also expanded its footprint across Europe with the launch of the Amazon Prime Now app in Italy, offering shoppers a choice from a basket of 30 different fruits and vegetables. On top of that, rumors are rife that Amazon will enter the German market later this year.
Morrisons has been in discussions with Ocado to grow Morrisons.com and an agreement in principle has been reached.
It involves Morrisons taking space in Ocado's Customer Fulfillment Centre (CFC) just outside of London and Ocado delivering store pick solutions for Morrisons.
According to the supermarket, this would enable Morrisons.com, working with Ocado, to expand its online reach and sell all over the U.K.
However, this amended agreement is subject to detailed terms being agreed and will only proceed if it enables Morrisons to achieve profitable growth online.