Amazon’s threat to disrupt yet another industry has gained strength after detailing how it will work with Morrisons to deliver everyday groceries.
Shares in WM Morrison Supermarkets (MRW) edge higher to 222.8p as it confirms a pilot scheme launches today in parts of London and Hertfordshire.
Amazon Prime customers will be able to order food, drink and other items and have them picked from their local Morrisons store. Amazon will charge £6.99 for delivery within one hour or free for a two-hour slot.
Morrisons has been acting as a wholesaler to Amazon since June. It says the range of products in this partnership has subsequently been expanded.
The relationship is also taking Amazon customers into Morrison stores. Hundreds of Amazon collection lockers will be installed in Morrisons supermarkets this year so customers can pick up non-food items they've ordered through Amazon's website while they do their grocery shopping.
The supermarket says that the Amazon initiatives will contribute to the ‘£50m to £100m of incremental profit opportunity’ it outlined at full year results.
We recently outlined in Shares why Morrisons is a very attractive investment. At the time of writing, there wasn’t a single analyst with a ‘buy’ rating on the stock according to data from Reuters. The Amazon deal could prompt City experts to rethink their neutral or negative stance, in our opinion.
Amazon is rapidly becoming a serious worry for many UK retailers as it expands the breadth of its services beyond a simple web platform to sell goods.
For example, it launched a fashion proposition in September which allows shoppers to try on clothing, shoes and jewellery and send items back free of charge on eligible items.
