Member Article

Morrisons to begin home delivery

Morrisons will begin to offer home deliveries, following a partnership with online grocers Ocado.

The agreement the sale of Ocado’s Dordon facility for £170m, which require a further £46m investment to accommodate Morrison’s range.

Morrisons anticipates that is new online business will incur a further £25m development costs in the year, taking its full year business development costs to £65m.

Dalton Philips, Chief Executive of Morrisons said: “This agreement is a significant strategic step for Morrisons. From a standing start, Morrisons will be competing in the fast growing on-line channel by the end of this year with a really compelling proposition.

“The customer gets our affordable fresh food delivered by Ocado’s state of the art distribution system. I’m confident that Morrisons.com will grow over time to be an operation of real scale and significance whilst creating meaningful long-term value for Morrisons shareholders.

The deal will undoubtedly raise eyebrows at Waitrose, where Ocado have an existing deal to deliver for the retailer.

Tim Steiner, Chief Executive of Ocado said: “Morrisons desire to offer its customers the choice of online shopping illustrates the structural shift we are seeing in favour of the channel. We see Morrisons decision to adopt our model to drive its online launch as a further endorsement of our technological and logistical excellence.

“This validation should support the internationalisation of our model as well as the growth of our UK business by increased market use of our operating model, enhancing capital efficiency and improving returns

“Our customers will see no change to the service they receive from Ocado as a result of this agreement. We will continue to source products under our long term agreement with Waitrose, and our customers will continue to benefit from the existing high levels of service, wide range of products and competitive prices that they currently enjoy.”

This was posted in Bdaily's Members' News section by Tom Keighley .