Ocado is to support Morrisons in its venture into the online shopping sector, bbc.co.uk reports.
Previously, Morrisons had been concerned about how profitable an online grocery service would be, but after lagging behind its competitors thanks to its resistance, it decided to launch an e-commerce website by (at the latest) January 2014.
Ocado will support it by lending logistical support from its Midlands-based warehouse, in Dordon – although the delivery vans will bear the Morrisons branding, as will the new website. For the use of Ocado’s distribution centre, Morrisons has paid £170 million into it. Its new website will require a further £46 million in funding.
Morrisons’ chief executive, Dalton Philips, called the move a “significant” step for his company, which is one of the only prominent British grocers not to offer online shopping.
He continued: “From a standing start, Morrisons will be competing in the fast-growing online channel by the end of this year, with a really compelling proposition.
“I’m confident that Morrisons.com will grow over time to be an operation of real scale and significance, whilst creating meaningful long-term value for Morrisons shareholders,” Philips added, cited by telegraph.co.uk.
Although the move signals good news for Morrisons, it may well damage Ocado’s long-standing relationship with Waitrose – from which Ocado secures supplies for its own online shopping service. A spokesperson for Waitrose confirmed in a statement that the chain is “carefully” examining the situation and has enlisted its lawyers to ascertain whether or not the Morrisons/Ocado partnership represents a breach of contract.