Morrisons expands home delivery service after new deal with Ocado

UK supermarket chain Morrisons will further expand its home delivery service in the United Kingdom after striking a new deal with online supermarket Ocado. Morrisons will now use its own stores to pick products for delivery, thereby doubling its reach.

The online supermarket of Morrisons was already available to about half of households in the UK, but it doesn’t deliver goods to areas such as Scotland or the South West. Morrisons already partnered with online supermarket Ocado in 2013, which enabled the supermarket chain to finally launch an ecommerce business. Now it renewed the deal, which lets Morrisons expand its home delivery service in the country. Aside from using its own stores to pick products for delivery, Morrisons will also increase the number of non-food brands it sells online, the BBC writes.

Expectations are the renewed deal won’t be profitable immediately. Its online grocery business will remain loss-making in the short-term. But together with its wholesale distribution business and food manufacturing division, profits should boost by up to 100 million pounds in the future.

Ocado could partner with other retailers

Part of the renewed deal with Ocado, is that this online supermarket will have fewer restrictions that prevent it from working with other retailers. Nonetheless, the online grocer still agreed not to partner with Morrisons’ competitors Tesco, Asda, Sainsbury’s, Aldi and Lidl.