Morrisons has opened up its exclusive relationship with Ocado so it can have a closer relationship with Amazon and scope out new opportunities in the ultra-fast delivery space.
Speaking on a press call this morning (9 May), chief executive Dave Potts said loosening the reins on the partnership will “open the way for significant potential opportunities and partnerships” and allow Morrisons to “think more widely” in this area.
“Ocado remains an important partner but this means we can dance [at] more than one wedding and we can mean more things to more people and we intend to do that,” he said. “When we look across consumers, as they change, Morrisons must change.”
Four of the Amazon channels Morrisons serves – Pantry, Fresh, Amazon.co.uk and Prime Now – will remain on the wholesale arrangement, while Morrisons.com with Amazon will move to direct selling by Morrisons. This is something Potts said will continue to grow from the eight stores it is currently in.
There are special opportunities ahead for Morrisons to be involved in that consumer change around next meal and last mile.
Dave Potts, Morrisons
While Potts would not disclose any details of the “range of commercial discussions” Morrisons has been having, he hinted that there have been talks with companies in the same bracket as Just Eat and Uber.
“As both a food maker and shopkeeper, and not in every location in the country with bricks and mortar, I do think there are special opportunities ahead for Morrisons to be involved in that consumer change around next meal and last mile and how those things can be fulfilled,” Potts said.
“There are a number of companies entering the market to be part of that last mile of fulfillment, very short time-scales between an order from the consumer to the receipt of the goods, who believe their know-how and their wheels can add value to both retailers and consumers. [Just Eat and Uber] would be part of the type of companies who are involved in that.”
In its latest financial results for the first quarter, Morrisons reported “good progress” across its wholesale business, which contributed 2.1% to an overall group like-for-like sales increase of 2.3% (excluding fuel).
It said the rebrand of McColl’s stores to Morrisons Daily, and the conversion of MPK fuel forecourt stores to both Morrisons Daily and Safeway Daily, had started well with “strong sales increases”.
Morrisons credited the “robust” performance of its retail division, which contributed 0.2% of total like-for-like sales, despite the “political and economic uncertainty continuing to impact consumer confidence”. Over the Easter period like-for-like sales rose by 1.7% and were up 3.4% compared to two years ago.