Amazon has signed a deal with the major UK supermarket chain Morrisons to deliver fresh and frozen groceries to Amazon’s customers who make use of Amazon Prime Now and Amazon Pantry. The supply arrangement is a great deal for Amazon who wants to get fresh foods to customers as quickly as possible.
Morissons shared the news on this partnership via its corporate website. As a result, hundreds of the supermarket’s products will be available to Amazon Prime Now and Amazon Pantry customers. According to the British supermarket chain, the deal is a way of making the supermarkets strong again. Also, by partnering with Amazon, Morrisons thinks it has an opportunity to build a broader business that complements its supermarkets and is also consistent with its “commitment to pursue capital light growth”.
‘Opportunity to become a broader business’
The wholesale supply agreement gives Morrisons the opportunity to grow its volume and to leverage its manufacturing, distribution and wholesale capabilities. “The combination of our fresh food expertise with Amazon’s online and logistics capabilities is compelling”, says Morrisons’ chief executive, David Potts. “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.”
In discussions with online supermarket Ocado
Aside from the Amazon deal, Morrisons has also been in discussions with online supermarket Ocado to grow Morrisons.com and according to the supermarket chain an agreement in principle has been reached. If it goes ahead, Morrison will take space in Ocado’s new customer fulfilment service in Erith, London, and Ocado delivering a store pick solution for Morrisons. When implemented, this would enable Morrisons.com to sell to customers all over Great Britain. Morrisons emphasized that the amended agreement will only proceed if it enables the company to achieve profitable growth online.