U.K. supermarket chain Morrisons will supply groceries to Amazon customers through a new agreement that will make hundreds of Morrisons food products available to Amazon Prime Now and Amazon Pantry customers.
Morrisons will provide a wholesale supply service to Amazon, allowing Amazon's customers access to a wide range of Morrisons ambient, fresh and frozen products.
Amazon Pantry was launched in the U.K. market last year, but did not offer fresh food.
Morrisons said the arrangement provides an opportunity to build a broader business – “growing volumes and leveraging our manufacturing, distribution and wholesale capabilities” – that complements its supermarkets.
"Today's agreement is built on Morrisons unique strengths as a food maker. The combination of our fresh food expertise with Amazon's online and logistics capabilities is compelling,” said David Potts, chief executive of Morrisons. "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."
Morrisons has also been in discussions with Ocado to grow its online business, Morrisons.com, and an agreement in principle has been reached.
The agreement involves Morrisons taking space in Ocado's new Customer Fulfillment Centre (CFC) in Erith, and Ocado delivering a store pick solution for Morrisons. When implemented, this would enable Morrisons.com, working with Ocado, to sell to customers all over Great Britain.
Morrisons said this amended agreement is subject to detailed terms being agreed and will only proceed if it enables it to achieve profitable growth online.
