Morrison’s eye belated digital push with potential Ocado partnership to arrest profits slide
Supermarket chain Morrison’s has announced that it is in talks with online retailer Ocado to launch an online food offer of its own by January 2014 in a bid to arrest a slide in profits.
Preliminary results released this morning show that the retailers underlying full-year profits before tax dropped 4% to £901m, prompting the bid to seek out alternative revenue streams.
Morrison’s is currently the only grocer in Britain’s ‘top four’ not to host a website offering the home delivery of food.
Dalton Phillips, Morrison’s chief executive, said: “We may be a late entrant to the online food market but we have learnt from our involvement with Kiddicare and Fresh Direct. We have long been a leader in fresh food and our craft skills and vertical integration really set us apart 3 from the competition. Ensuring that these points of difference translate into our online food offer will be a priority.”
Phil Dorrell, director of retail consultants, Retail Remedy, commented: "These disappointing results from Morrisons won't have surprised the city. What's perhaps hardest to understand is why it will now be 2014 before Morrisons has an online food operation?
"After two years of development, the current online offer remains poor, with only wine as a home purchase. In an online world, Morrisons isn't online, and that says it all. Its failure online reflects a real lack of leadership, decision-making and above all urgency.
"On the surface, Morrisons is manoeuvring itself into position. Its recent purchase of 49 Blockbuster and six HMV outlets reflects this. But again, will it act decisively enough to make inroads into the market?”
Of the potential licence agreement with Ocado, no agreement has yet been reached Morrison's has highlighted, stating that a 'further announcement' will be made 'in due course'.