Morrisons buys stake in online grocer as annual profits grow 13%
Morrisons has bought a 10% stake in US-based online grocer FreshDirect for £32m to boost its own online ambitions.
Speaking as Morrisons unveiled a 13% increase in pre-tax profits to £869m for the year to 30 January, chief executive Dalton Philips announced the retailer would launch an online shopping operation within two years.
Philips will join the board of FreshDirect, which currently serves over 600,000 customers in New York, New Jersey and Connecticut.
Morrisons will also embed a team in FreshDirect’s Long Island City HQ to learn about its e-commerce model.
The move comes after Morrisons last month forked out £70m to buy UK baby goods seller Kiddicare, which makes 80% of its sales online. That deal handed Morrisons access to Kiddicare's highly regarded sales platform.
“I have seen retailers all over the world [and] few have inspired me as much as the team at FreshDirect, a highly successful and profitable food retailer with a track record of terrific customer service,” Philips said.
The retailer also announced that it had acquired the first three sites for its ‘M Local’ convenience trial. The first store will open in July.
Morrisons said total sales for the past year were up 7% to £16.5bn. Like-for-like sales excluding VAT and fuel were up just 0.9% over the 12-month period.
Kiddicare swoop kick-starts Morrisons’ online adventure (15 February 2011)
Daily Bread: The Kiddi's alright (15 February 2011)
By George! Morrisons to launch clothing range (7 February 2011)