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| Morrisons to offer online shopping in Ocado deal | 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 delivery vans will carry the Morrisons brand, 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. |
| 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 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 expects a return on its investment within three or four years, Mr Philips said. | |
| Neil Saunders, retail analyst with Conlumino, told the BBC: "This is a transforming deal for Morrisons that will allow them to make the move online in an efficient and effective way that is easily scalable. In many ways, it's the best possible solution for them. | |
| "It is a good deal for Ocado, too, in that it broadens its business model and provides it with an injection of capital for future investment. The unknown in the mix is the reaction of Waitrose." | |
| Waitrose worry | |
| 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. |
| 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 30% in morning trading on news of the deal. Its shares have risen 149% over the past year. | |