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Morrisons and Ocado ink e-commerce deal

20 May 2013 - 10:10 by Mike Price

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Just days after Morrisons was criticised for its lack of action over the launch of an e-commerce service, the supermarket giant has confirmed that it will be working with delivery firm, Ocado, to bring online shopping to customers across the UK.

BBC News reports that Morrisons will be paying 170 million to Ocado to take over the distribution centre which it currently operates in Dordon, before investing a further 46 million, so that it can create its own home delivery network.

Although the service will be fully branded by Morrisons, with even the vans getting the famous green and yellow logo, it will be Ocado which takes responsibility for handling the logistics of the operation, at least in the short term.

Morrisons is planning to make its e-commerce service available by January of 2014,with company CEO, Dalton Philips, explaining that this was a really positive deal for both his firm and Ocado.

He said that Morrisons could start to see a return on its initial investment within three years, such is the revenue-generating power of safe shopping online.

Ocado already handles the delivery service for Waitrose and this will apparently remain unchanged, even after Morrisons comes onboard, which is good news for customers who already shop with this rival supermarket.

Waitrose MD, Mark Price, told BBC News, that he was keen to go over the contract between Morrisons and Ocado, to check that there is no part of it which contravenes the terms of his company's agreement with the distributor.

At peak about 40,000 people buy their groceries online and receive them through Ocado each week in the UK. With Morrisons now part of the same infrastructure, it could mean major growth for the distributor and yet another way for consumers to access affordable e-commerce.