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Morrisons to offer online shopping in Ocado deal | |
(about 1 hour later) | |
Morrisons, the UK's fourth largest supermarket chain, is going into business with internet grocer Ocado. | Morrisons, the UK's fourth largest supermarket chain, is going into business with internet grocer Ocado. |
Morrisons says it has agreed a deal that will enable it to launch an online grocery service by January 2014. | Morrisons says it has agreed a deal that will enable it to launch an online grocery service by January 2014. |
The website and delivery vans will be Morrisons branded, with logistical support by Ocado from its Dordon distribution centre in the Midlands. | The website and delivery vans will be Morrisons branded, with logistical support by Ocado from its Dordon distribution centre in the Midlands. |
At the moment, Morrisons is the only one of the big four chains not to offer online shopping. | At the moment, Morrisons is the only one of the big four chains not to offer online shopping. |
Morrisons will make an initial payment of £170m to Ocado to acquire the Dordon centre, then a further £46m to expand it and establish a delivery network. | Morrisons will make an initial payment of £170m to Ocado to acquire the Dordon centre, then a further £46m to expand it and establish a delivery network. |
Chief executive Dalton Philips told BBC Radio 4's Today programme: "This is a very good transaction for both parties. We're going from a standing start to the fast lane in the blink of an eye." | Chief executive Dalton Philips told BBC Radio 4's Today programme: "This is a very good transaction for both parties. We're going from a standing start to the fast lane in the blink of an eye." |
Morrisons expects a return on its investment within three or four years, he said. | Morrisons expects a return on its investment within three or four years, he said. |
Ocado said its current contractual agreement with Waitrose would "remain unaffected by these arrangements" and that customers would experience "no change to the service" as a result of the deal. | Ocado said its current contractual agreement with Waitrose would "remain unaffected by these arrangements" and that customers would experience "no change to the service" as a result of the deal. |
It will continue to deliver Waitrose food from the Dordon centre. | It will continue to deliver Waitrose food from the Dordon centre. |
But before the Morrisons deal was announced, Waitrose managing director Mark Price expressed concern, telling the BBC: "I'll want to look really closely at that contract to see whether there is any breach of the agreement we have [with Ocado]". | But before the Morrisons deal was announced, Waitrose managing director Mark Price expressed concern, telling the BBC: "I'll want to look really closely at that contract to see whether there is any breach of the agreement we have [with Ocado]". |
Waitrose signed a deal with Ocado in 2000 and now serves up to 40,000 online shoppers a week. | Waitrose signed a deal with Ocado in 2000 and now serves up to 40,000 online shoppers a week. |
Ocado's share price surged 42% in early morning trading on news of the deal, pushing the company's market valuation to nearly £1.2bn. | |
Its shares have risen 149% over the past year. |