Morrisons has announced plans to further ramp up its partnership with Amazon after admitting spending in its traditional supermarkets had taken a “battering” from Brexit.
The retailer announced today (12 September) it had signed an undisclosed multi-year deal with the online giant, to replace its previous rolling relationship.
It revealed plans to grow its offering on Amazon Prime Now to 23 towns by the end of the year, as it tries to grow its “last mile” deliveries to provide new growth against what CEO David Potts admitted was a turbulent time for the retail sector.
The growth of its online grocery business on the Amazon platform comes after a dramatic cooling of its relationship with Ocado. It emerged in May Morrisons would no longer be Ocado’s exclusive digital partner in the UK, as it looked to take its online business in a new direction.
Since then, it has transformed its wholesale relationship with Amazon to build a service, Morrisons at Amazon, offering same-day grocery home delivery on Amazon Prime. Now it has customers in cities including Leeds, Manchester and Birmingham as well as parts of London and the Home Counties, including some with one-hour delivery.
The next rollout of Morrisons on Prime Now, in Eccles, Manchester, will be followed by other locations including Newcastle and Portsmouth, said Potts.
He told The Grocer the change in relationship with Amazon meant it had become the “seller of record” on the Amazon Prime Now platform.
Meanwhile, Potts said he believed Morrisons was better placed to survive the throes of Brexit than other supermarkets because of its high proportion of British products, and its position as the world’s second largest provider of British food.
But he admitted: “We have seen an impact on consumer confidence. Brexit is an overhang on the industry and our consumers are a big part of that. People are generally being cautious and quite careful with their spending.”
Potts also said Morrisons planned to turn itself into more of a “food product company”, which as well as growing its online business with Amazon, will see it look to expand its role as a wholesale provider.
Today it announced a new forecourt partnership with Harvest Energy as well as the rollout of more convenience store trial formats with indie provider Rontec, as part of its plans to widen the scope of its wholesale empire.
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