Morrison makes late entry into e-commerce with £70m Kiddicare deal

Supermarket Morrisons has entered into online sales, a decade after Tesco, Asda and Sainsbury’s.

The supermarket group has acquired UK-based baby goods retailer Kiddicare for £70 million, but made no commitment to entering into large scale grocery sales online.

In the past, Ken Morrison, former chairman at the supermarket chain, said he did not believe in home delivery, branding it “as something he had done on his bike as a young man”.

Dalton Philips, current chief executive at Morrisons, said this week that the company now sees the move as important and that the new deal would be an “enabler” for online sales. “This acquisition brings not only a respected, successful and fast growing specialist retailer into the Morrisons group but also a robust, scalable and highly advanced technology platform around which we can begin to build our e-commerce offer,” he said.

But Philips added that the move does not indicate the company had plans for a complete online grocery service.

"I see food and non-food as very distinct," Philips was reported in the Guardian as saying. "This is our first foray into learning about a channel we don't understand very well. Food is a very different proposition."

It made sense to buy rather than build a website from scratch, the company said, as web development could be "painful".

When Morrison acquired the Safeway chain in 2004, it had a tradition of developing its core systems in-house and was sometimes seen as reluctant to take up new technology – in contrast with Safeway, which until the acquisition, was known for adopting cutting edge systems as the first supermarket to implement Chip and PIN and making early trials of RFID technology.

Three years later, Marc Bolland, then-chief executive at Morrison, said the company would still “not be seeking to implement any ‘leading edge’ technology, as we believe our competitive advantages come in other areas, such as in-store service”.

Nevertheless, Morrison did later begin a major IT overhaul that involved the implementation of a complete Oracle retail suite of merchandising, planning and stores applications, plus the Oracle E-Business Suite for financials, HR/payroll and manufacturing.

It also rolled out Oracle’s Siebel platform for CRM and Oracle Fusion middleware, including Oracle SOA Suite and Oracle Identity Management – all underpinned by Oracle databases on HP servers.

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