Morrisons ‘should feel confidence in excellent Amazon move’, GlobalData

Yesterday we reported that Morrisons and Amazon are gearing up to roll-out their same-day delivery service for groceries to Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth. It’s a great move, according to Thomas Brereton, Retail Analyst at GlobalData.

It clearly demonstrates both the commitment from Amazon to gain stronger credentials in the UK grocery market and Morrisons’ desire to become a more prominent – and geographically renowned – online supermarket, he says.

With the value of the online food market set to increase by 48.9% over the next five years – significantly higher than the 15.5% for the overall grocery market, according to GlobalData, it is understandable why Morrisons is eyeing expansion in this space. However, it joins the end of a list of similar announcements from food retailers, with Marks and Spencer launching a £750 million joint venture with Ocado and Waitrose signing a deal with TDP to forge a £1 billion online business in three years’ time.

Nonetheless, Morrisons has made a smart move, Brereton believes. “Leveraging Amazon’s reputation and last mile logistical capabilities will help it create a point of differentiation to its Big Four rivals, and will enhance its ability to attract the ever more demanding online shopper,” he comments. “And although four of the five cities are situated close to Morrisons’ main hunting ground of the north of England, promised expansion of the service into Portsmouth shows that Morrisons are looking to conquer more of the south.”