AmazonFresh to Move Into United Kingdom Following Morrisons Deal
UNITED KINGDOM - AmazonFresh is sinking its hooks even further into the United Kingdom, penning a deal with regional supermarket chain Morrisons to distribute both its fresh and frozen products to its Prime customers.
Under its Pantry service launched in late 2015, "hundreds" of Morrisons products will be available to U.K. customers." Pantry charges Amazon's U.K. Prime members a flat £2.99 delivery fee for the first "virtual box” of groceries, with each additional box being £0.99.
Previously only providing non-perishable items and packaged food products, the Morrisons deal with Morrisons will allow Amazon to take on leading U.K. retailers, like Tesco, Asda, and Sainsbury, as well as their repective home delivery services.
"Today's agreement is built on Morrisons unique strengths as a food maker,” explained Morrisons CEO David Potts in a press release. “The combination of our fresh food expertise with Amazon's online and logistics capabilities is compelling. This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business."
Morrisons shares were boosted by five percent, following the announcement, with delivery rival Ocado’s shares falling ten percent due to what Reuters says are investors fears that the move would increase competition and reduce the likelihood that Amazon could one day buy the company. Tesco, who is currently market leader in the U.K., saw shares fall by three percent.
"The advance of Amazon as a participant in U.K. grocery is a potential challenge to the whole trade, in time," Shore Capital retail analyst Clive Black, a retail analyst at Shore Capital said to Bloomberg on Monday. "Any new entrant is, but particularly the American behemoth."
For more on the developing UK retail market and AmazonFresh’s future plans, continue watching AndNowUKnow.
