Morrisons tightens binds with Amazon in move that will 'strike fear' into the hearts of its rivals

Morrisons tightens binds with Amazon in move that will 'strike fear' into the hearts of its rivals

Morrisons tightens binds with Amazon to offer 'ultra fast' delivery to more UK cities in move that will 'strike fear' into the hearts

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Morrisons tightens binds with Amazon to offer ‘ultra fast’ delivery to more UK cities in move that will ‘strike fear’ into the hearts of its supermarket rivals

  • Morrisons has expanded its same-day delivery partnership with Amazon
  • The service will come to Glasgow, Newcastle, Liverpool, Sheffield & Portsmouth
  • The move poses another threat to the traditional supermarkets 

Morrisons has taken its partnership with online giant Amazon up a gear – a move that analysts say will ‘strike fear’ into the the hearts of its rivals as the online grocery market continues to evolve at pace.

Following a trial in four UK cities, the firms are now expanding their same-day online food delivery to more parts of the UK, starting with Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth later this year.   

UK expansion: The Amazon Prime delivery service will come to Glasgow, Newcastle, Liverpool, Sheffield & Portsmouth this year

UK expansion: The Amazon Prime delivery service will come to Glasgow, Newcastle, Liverpool, Sheffield & Portsmouth this year

The service launched three years ago and is already available to Prime Now customers in Leeds, Manchester, Birmingham and some parts of London.  

Morrisons said today that it will be extended further across the UK in future years too.  

It comes as the traditional supermarkets like Tesco and Sainsbury’s grapple with a fast-changing market, including the rise of food delivery and the march of the German discounters Aldi and Lidl.    

‘Competitive threats continue to loom large,’ said AJ Bell investment director Russ Mould. ‘Amazon is a name which can strike fear into the hearts of established operators in a host of different industries.’   

Morrisons boss David Potts (above) said it was an 'ideal combination'

Morrisons boss David Potts (above) said it was an ‘ideal combination’

The supermarket boss David Potts said: ‘Morrisons’ conveniently located local supermarkets and Amazon’s very popular website and customer offer are an ideal combination, offering ultra-fast same-day grocery home delivery for customers in and around cities across Britain.’    

The rise of one-hour delivery stems from high demand from the so-called ‘Prime generation’, who want their groceries immediately.    

‘Having trialled out the service in key locations, the nationwide rollout is a major step up for Morrisons and a sign that a) the service is delivering and fundamentally is a success, and b) ties with Amazon remain firm,’ said Neil Wilson from Markets.com.  

Analysts at Peel Hunt speculate that the expansion with Amazon could be a response to Morrisons’ newly loosened agreement with Ocado following its warehouse fire.

As well as changes to its warehouse agreements, the exclusivity of the deal with Ocado was also relaxed, potentially allowing Morrisons to agree a new partnership with another digital player and expand its Amazon venture.  

‘One could argue that this is potentially a headwind for Ocado as it increases the reach of a same day proposition,’ Peel Hunt said.

‘However, Ocado […] has recently launched Ocado Zoom for within-the-hour delivery. Moreover, Morrisons and Ocado.com focus on different segments of the market – hence it is more likely a headwind for Tesco.’  

The home delivery service allows customers to order a full Morrisons shop online, which is then picked up at a local store, and delivered by Amazon.

In some locations, customers can receive deliveries within one hour of the order being placed.

Doug Gurr, Amazon UK country manager, said Amazon was ‘committed to growing our grocery business’.



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