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Ocado & Morrisons strengthen grocery delivery deal

11 August 2016 - 13:44 by Simon Crisp

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People in more parts of the UK will be able to order their groceries from Morrisons via safe shopping online and have them delivered at home courtesy of Ocado, thanks to a new deal struck between the two firms.

Ocado was already heavily involved in Morrisons’ e-commerce expansion over the past two years, but the Guardian reports that it has just committed to creating a solution that will allow it to serve customers in London and the South East, as well as in the North East of England and even up in Scotland.

These areas will be added to Morrisons’ list of those eligible for delivery starting in 2017, with company chief exec, David Potts, stating that this enhancement comes after the decision to invest heavily in boosting its presence in the online marketplace.

In recent years, Morrisons has not only had to cope with stiff competition from established retailers like Tesco and Sainsburys, both of which had offered safe shopping online for more than a decade before it even entered the market, but also from growing discount outlets like Lidl and Aldi.

The deal struck with Ocado will see Morrisons help to fund the creation of a new distribution centre in South London, in exchange for the increased delivery coverage and the ending of its profit-sharing agreement.

Industry observers believe that both companies are likely to benefit from this arrangement, strengthening their existing relationship and giving Morrisons a better chance to encourage its customers to shop online wherever they happen to live.

Of course, there is still an uphill struggle faced by the supermarket because it entered the e-commerce fray so late in the day. And with Amazon poised to embrace grocery deliveries in a big way, there are still challenges ahead.