Morrisons reveals multi-year deal with Amazon

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Morrisons has signed a multi-year deal with online giant Amazon


Morrisons reveals multi-year deal with Amazon as a sales slip ends the supermarket’s three and a half year run of growth

  • Morrisons said sales in the three months to 4 August fell 1.9 per cent
  • Shares in Morrisons rose 3 per cent to 201p following the trading update

Morrisons has signed up to a new multi-year agreement with online giant Amazon as the supermarket attempts to keep pushing further into the wholesale market.

Chief executive David Potts revealed the deal, which will enable more shoppers to order Morrisons products for same day delivery on Amazon – expanding on a previous trial.

Shares in Morrisons opened up 7.3p at 201.3p and ‘will be exploring new opportunities to innovate and improve the shopping experience for both Morrisons and Amazon customers’.

Morrisons has signed a multi-year deal with online giant Amazon

Less was said about the supermarket’s relationship with Ocado, which currently fulfils online grocery deliveries for Morrisons, although Mr Potts said the partnership remains in place.

He added: ‘That’s not ending any time soon and we’ve got an important relationship with Ocado.’

The deal with Amazon comes as the supermarket revealed its 14 consecutive quarters of growth have come to an end, with sales in the three months to August 4 falling 1.9 per cent on a like-for-like basis.

Bosses pointed out the fall was due to the strong comparison with last summer, which had better weather and major sporting events.

Total revenues for the six months to August 4 rose 0.4 per cent to £8.83 billion and pre-tax profits were up 48.5 per cent to £202 million, leading to the payout of a second special dividend this year.

But the primary focus for Morrisons is on expanding its wholesale business, with Mr Potts saying he wants to see more of his products in high street convenience stores.

A trial with McColl’s to provide food and drink is progressing well, according to the company, as a new forecourt partner and export partner were unveiled.

On Brexit, Mr Potts said he has not seen the same level of stockpiling that came in the lead-up to the original departure date of March 31 but he echoed the warnings given by others that supply could be hit, especially with the British growing season coming to an end.

He said: ‘The end of the British growing season for salads and fruits of course makes inbound from mainland Europe more pertinent to what retailers can buy.’

Former footballer John Barnes promotes the Carabao Cup outside a branch of Morrisons

Former footballer John Barnes promotes the Carabao Cup outside a branch of Morrisons

Morrisons produces and buys two-thirds of its products in the UK but in preparation for a potential no-deal Brexit he said suppliers of goods from the EU are being asked to move away from the pinch points of the Dover-Calais route.

‘We’re moving away from Calais where we can,’ Mr Potts said.

His comments came as the Government published its Yellowhammer memo on the impact of a no-deal Brexit.

It said fresh food supplies are likely to be affected and held up at ports, and also claims that food prices ‘will go up’.

When asked whether he agreed with the Government’s assessment, Mr Potts would not be drawn, saying ‘consumers determine the price’.

Analysts reacted positively to the news, saying it could be a sign of a slight recovery in the grocery market.

Bruno Monteyne, retail analyst at Bernstein said: ‘Doomsday will have to wait another year. We think this set up bodes well for the other grocers in coming weeks.’

 



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