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Morrisons to supply groceries to Amazon customers

01 March 2016

Morrisons will supply groceries to Amazon customers in the UK under a new partnership between the two companies.

In a statement, the supermarket said it would supply fresh, frozen and non-perishables to Amazon Prime Now and Amazon Pantry customers.

“This is a low risk and capital-light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business,” said David Potts, chief executive of Morrisons.

“We look forward to working with Amazon to develop and grow this partnership over the coming months.”

Keith Anderson, VP of Strategy and Insights for Profitero said the partnership was unlikely to be a key plank of either party’s strategy in the longer term.

“The deal will modestly expand Amazon's selection and is unlikely to be a substitute for Amazon's more comprehensive Amazon Fresh service, which has been speculated to be launching imminently in the UK for months,” he said.

“In its headquarters market, Amazon has struck similar deals with wholesalers, distributors, and restaurants to expand selection available through its Amazon Fresh and Prime Now services.”

He added: “For Morrisons, the deal is a low-capital, low-commitment way to increase volumes. It may also give Morrisons leverage in ongoing discussions with Ocado as Morrisons seeks to expand its geographic coverage for to the entire UK.”

Ocado has a 25-year agreement with Morrisons to run the supermarket's online delivery service. But it does not offer coverage for parts of the north and Scotland. 

On Tuesday, the day after the announcement, Morrisons shares rose by six per cent, while Ocado’s shares fell by eight per cent. 

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