Going forward, Amazon Prime members in the U.K. who shop at Morrisons will be able to tap into same day grocery delivery. This continues a partnership the two firms struck in February that saw the British supermarket chain begin wholesale supply to the Internet. That service went online in June — and internal sources note that so far things have gone well enough to extend the program to thousands of Morrisons’ products.
Shares in Morrisons, up 50 percent so far this year, added 0.7 percent in early trading — on the other hand, shares in online grocery company Ocado, which has its own agreement with Morrisons, are down as Morrisons is cozying up to Amazon.
The new “Morrisons at Amazon” service will allow Amazon Prime customers in the London metro areas to order the full range of Morrisons’ products online via Amazon’s Prime Now app.
Morrisons is the smallest of Britain’s “big four” supermarkets which have come under pressure from the rise of German discounters Aldi and Lidl. But online grocery is big business today — and getting bigger by the minute. The online food sector is expected to grow by 68 percent to 17.9 billion pounds ($22.35 billion) in the U.K. within the next five years, according to industry research group IGD.
Orders will be picked out by shop staff at a local Morrisons store and delivered the same day by Amazon either within one hour for 6.99 pounds ($8.72) or within a two-hour slot for free.
Morrisons said its partnership with Amazon will contribute to a 50-100 million pounds profit boost it has sought this year.
“For Morrisons, this broadens the offer and gives them more ways to reach customers online where they are still in the early stages of development. For Amazon, this is one of a vast number of things they are trialing,” said Bernstein analyst Bruno Monteyne, who has a “market perform” rating on Morrisons.
This deal will be looked over again in August — at that time, Morrisons will have the option of branching out into its own home delivery services. Morrisons has said it will look into such services for next year.