The company launched Amazon Pantry in the United Kingdom last November, as part of an initiative to expand its online grocery business there. Amazon Prime Now, which became available in London at the end of June, gives customers one-hour delivery of goods that include some supermarket staples, while Amazon Fresh is being tested in Birmingham and may be officially launched in other cities this spring.
Many of the U.K.’s largest grocery chains, including Tesco, Ocado (Waitrose’s online supermarket), Sainsbury’s, and ASDA, already offer delivery services, but Amazon may be able to take business away from them by leveraging its logistics system to offer lower prices and more discounts. The company has already acquired two logistics buildings in London that were previously used by Tesco.
In a statement, Morrisons chief executive David Potts said “Today’s agreement is built on Morrisons unique strengths as a food maker. The combination of our fresh food expertise with Amazon’s online and logistics capabilities is compelling. This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business.”
Morrisons also said in today’s announcement that it has reached an agreement in principle with Ocado to develop an in-store pickup system for orders throughout Great Britain.