Morrisons will be able to extend online deliveries into south London, Scotland, East Anglia and the north-east of England next year after signing a new deal with Ocado.
The expansion comes after Ocado, which has been running the technology and delivery network for Morrisons’ online business since it launched in 2014, agreed to develop a new IT system to allow the supermarket to serve online shoppers from its stores as well as Ocado’s central warehouse in Dordon, Warwickshire.
It has also agreed to deliver thousands more non-food items not currently offered on Morrisons’ website.
David Potts, chief executive of Morrisons, which has been struggling to fight back against rising competition from discounters Aldi and Lidl as well as online shopping, said: “The new investments in online growth are further examples of Morrisons building a broader business.”
Under the new arrangement Morrisons will halve the amount it pays towards Ocado’s research and development to £4m a year from 2018 and will no longer pay a 25% cut of any future profits from its online business for the next 15 years.
In return, Morrisons has agreed to help fund 30% of the costs of developing Ocado’s new distribution centre in Erith, south London, which is due to open in 2018. It has also allowed the online specialist to run branded online services for other retailers potentially including Marks & Spencer and the Co-op. It continues to be blocked from providing similar services to major Morrisons competitors – Tesco, Sainsbury’s, Asda, Aldi and Lidl.
作为回报，Morrisons已同意为Ocado将于2018年在伦敦南部的Erith新开设的分销中心提供30%的资金。该分销中心还允许在线专家为其他零售商提供品牌在线服务，包括Marks & Spencer与其合作社。分销中心将继续被禁止向Morrisons的主要竞争对手Tesco、Sainsbury’s、Asda、Aldi以及Lidl提供类似的服务。
Under its new deal with Morrisons, Ocado could also renegotiate its tie-up with Waitrose. The upmarket grocer currently sells goods via Ocado’s own online service but the supermarket operates Waitrose.com deliveries itself from stores.
Analysts said the new deal was good news for both Ocado and Morrisons. The terms of the continuing relationship are clearly better for the supermarket than the widely-criticised deal it originally cut with Ocado. Morrisons paid £140m to buy the Dordon site and equipment as well as £16m towards expanding capacity on top of a licence and integration fee of £30m.
The deal offers access to about 60,000 orders per week or £350m of new online business out of the Erith distribution centre by 2020 for a lower sum, although the details were not revealed on Tuesday.
For Ocado, analysts said the agreement bolstered the online specialist’s attempts to find new clients for its services which it now calls the “Ocado Smart Platform”. Analysts at Goldman Sachs said in a note: “The deal represents the first OSP client it has signed and the reduced exclusivity opens the door for providing OSP solutions to other UK grocery retailers.”