MSE News: Morrisons to launch home deliveries after signing Ocado deal

Former_MSE_Helen

"Morrisons is set to roll out its delivery service by the end of this year after revealing a partnership with Ocado..."

Read the full story:

Morrisons to launch home deliveries after signing Ocado deal



Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

Lugh_Chronain

After hearing the news today adout Morrisons recently agreeing a deal that will enable it to launch an online grocery service by January 2014 curiosity got the better of me, I decided to email mySupermarket's press office and asked if they would be including Morrisons in their listings once they go live. I received the following shortly after contacting them.

Thanks for your email. We are excited to see Morrisons are going to have an online offering - it is what we have all been waiting for after all!

We will definitely be adding them to our site as soon as we are able. We will have to wait and see what is involved in getting them on-board, and we will only know that when they launch their online offering, so watch this space.

Thanks,

Kirsty Saunders, mySupermarket.com

It appears mySupermarket haven't yet got Morrisons on-board, haven't come to any agreement yet, though hopefully they should shortly after Morrisons launch their online service.

rogerblack

Lugh_Chronain wrote: »

It appears mySupermarket haven't yet got Morrisons on-board, haven't come to any agreement yet, though hopefully they should shortly after Morrisons launch their online service.

I question if they have come to an agreement with any of the various stores.
It took me about a couple of hours to generate a program to walk the Asda site, for example, and extract information on the price of every item.

Clearly, if this is to be a general service, and not simply a limited one in the Ocado area - it would involve Ocado building out their delivery network.
Does this mean that Ocado will be delivering to the remainder of the country that they are missing too?

The Ocado service area:

[Deleted User]

Ocado don't deliver to my area yet Asda, Tesco, and Sainsburys do. I take it they will mean Morrisons won't deliver hear either then.

Lugh_Chronain

You would think with the extra revenue Ocado will receive from Morrisons Ocado would be able to expand its service.

According to reports Morrisons will make an initial payment of £170m to Ocado to acquire its Dordon distribution centre in the Midlands, then a further £46m to expand it and establish a delivery network, apparently.

aldredd

From the article:

But the 25-year deal, which involves Morrisons paying up to £170 million to Ocado to buy the site and equipment, is controversial because Ocado already delivers for Waitrose, which is reported to be examining the tie-up.

Someone tell me I'm wrong, but I don't think that's strictly true. The nature of their agreement is that Waitrose are effectively a supplier of goods to Ocado, who then resell it to their customers.

antrobus

Lugh_Chronain wrote: »

You would think with the extra revenue Ocado will receive from Morrisons Ocado would be able to expand its service.

According to reports Morrisons will make an initial payment of £170m to Ocado to acquire its Dordon distribution centre in the Midlands, then a further £46m to expand it and establish a delivery network, apparently.

Confirmed by other reports, such as the Guardian which baldly states "Morrisons will pay £170m to buy Ocado's second warehouse, at Dordon, Warwickshire". Which is interesting, because previous reports regarding the Dordon centre (which only became operational a few months ago) have always refered to it as a '£210m facility'. So either Morrisons haven't bought the whole thing, or Ocado has just lost £40m.

Lugh_Chronain

That's interesting antrobus as you'd think it might be a win, win situation all round otherwise, i.e. Morrisons pays Ocado, Ocado expands its service due to extra revenue, both customers of Ocado, Waitrose and Morrisons benefit as Ocado's service expands. Also, Morrisons expects a return on its investment within three or four years. Everyone's a winner you'd think.

Also, if Ocado were to expand its service then you'd think Waitrose would benefit as well as they'd be able to reach more of their customers with an extended online/delivery service. It appears the only complaint Waitrose have in my opinion is competition, or am I missing something(?).

Do you think it's possible also that Ocado may have exaggerated the figures a little to get the best deal? It is a bit suspect though, or at least it appears that way.

DCFC79

aldredd wrote: »

From the article:


Someone tell me I'm wrong, but I don't think that's strictly true. The nature of their agreement is that Waitrose are effectively a supplier of goods to Ocado, who then resell it to their customers.

Yes thats how I see the Ocado Waitrose agreement works.

Deleted_User wrote: »

Ocado don't deliver to my area yet Asda, Tesco, and Sainsburys do. I take it they will mean Morrisons won't deliver hear either then.

Id say no if Ocado dont.

Lugh_Chronain

Correct me if I'm wrong though I don't believe that's the case. Surely if Ocado is allowed to expand its service due to extra revenue it will receive from Morrisons they'll be able to reach more customers, and that's including Waitrose as well. Unless Ocado have been undersold that is.

Also,

BBC News reports:

in a statement Waitrose said: "We have asked to see the detail of the deal and the operating arrangements. Meanwhile, we have instructed lawyers so that we can get a clear and unequivocal view of the contract and examine what might constitute a breach."

Even though contractually there may be a breach, do you think that Waitrose might be missing a trick here despite the competition? Surely in the long run they'll benefit, more online customers equals financial gain, surely.

However, and it has to be pointed out, reports on BBC News say: in the Morrisons agreement there is a "restrictive covenant" preventing Ocado from providing a similar online grocery service to more than one competitor to Morrisons at any one time.

DCFC79

Lugh_Chronain wrote: »

Correct me if I'm wrong though I don't believe that's the case. Surely if Ocado is allowed to expand its service due to extra revenue it will receive from Morrisons they'll be able to reach more customers, and that's including Waitrose as well. Unless Ocado have been undersold that is.

Also,

BBC News reports:



Even though contractually there may be a breach, do you think that Waitrose might be missing a trick here despite the competition? Surely in the long run they'll benefit, more online customers equals financial gain, surely.

However, and it has to be pointed out, reports on BBC News say: in the Morrisons agreement there is a "restrictive covenant" preventing Ocado from providing a similar online grocery service to more than one competitor to Morrisons at any one time.

Maybe the plan is to build some extra warehouses once its been taken up.

Yes I read that or a similar quote from a Waitrose suit.