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Morrisons strengthens Amazon delivery partnership

UK grocer Morrisons and online titan Amazon have strengthened their delivery and distribution partnership.

In the supermarket chain’s half-year results, announced on Thursday, the retailer said it had established “a multi-year partnership”, replacing what until now has been a relationship that operated on a “rolling basis”. Morrisons CEO David Potts did not go into detail about what the extended collaboration will entail, but it certainly strengthens the retailer's position as a key Amazon food wholesaler.

It signals the expansion of Morrisons’ super-fast, same-day delivery service using Amazon’s fulfilment network. Prime Now customers can order groceries from Morrisons, which are picked and packed at their local store and then delivered to their home by Amazon, sometimes within one hour.

The Morrisons via Amazon service is available in Leeds, Manchester, Birmingham, and parts of London and the Home Counties. It is currently being rolled out to parts of Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth.

Morrisons said “in future years, the Morrisons store on Prime Now will be expanded to further cities across the UK”.

The burgeoning partnership between Morrisons and Amazon gained a new lease of life in May when Ocado – the online grocer Morrisons uses to operate its eCommerce and fulfil web orders – permitted the supermarket to work more deeply with other providers. Ocado’s change in stance was primarily due to fact it needed extra capacity to serve customers after a fire destroyed its Andover warehouse in February.

Ocado will now have sole use of the new Erith fulfilment centre until January 2021, which was previously utilised by Morrisons. The Bradford-based supermarket is now working to increase its store-pick capacity, and grow orders through Ocado’s Dordon warehouse.

During the first-half period, Morrisons added several store-pick stores for Morrisons.com, which extended its online catchment to new areas including Falkirk and Dundee in Scotland, and parts of Devon, Cornwall and the north-west of England.

In the six months to 4 August, Morrisons reported a 5.3% rise in pre-tax profit before one-off items to £198 million, off the back of a 0.4% revenue increase to £8.83 billion.

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