Morrisons has announced it is finally entering the online food business, potentially in partnership with Ocado, following poor year end results
Ocado confirmed it is in talks with Morrisons to supply technology to the supermarket to help it launch its online business. Ocado said any deal would not see Morrisons take any financial stake in the company.
A Morrisons move to online channels has been called for by City analysts for a number of years. The company has, until now, proved resistant to online, even though its supermarket rivals had already firmly jumped on the online bandwagon.
The year end results posted today show that like-for-like sales fell 2.1% and that underlying pre-tax profits slumped 4%. In response Morrisons said it would now be entering the online food arena in 2014.
It also added that its IT systems replacement programme was "on track", and that it would provide the "foundation for accelerated cost savings in 2013-14".
Dalton Philips, Morrisons 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 [a US online food business Morrisons has a 10% stake in].
"We have long been a leader in fresh food and our craft skills and vertical integration really set us apart from the competition. Ensuring that these points of difference translate into our online food offer will be a priority.”
Morrisons has also just inked an extended fuel card deal with outsourcer Atos. As well as extending business fuel card services for the supermarket until 2019, Atos has now added Morrisons to its wider network of merchants that accept Atos' multi-merchant business account cards used by leading UK organisations.