Morrisons begins online deliveries

Morrisons sales slump by 21.4\%

Morrisons will begin delivering to online customers from January as it looks to make its products available across 50% of Britain within a year, it announced today.

Executives at the supermarket say that a million new households each month will be able to shop with it via the internet, reaching 13 million by the end of January 2015.
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The Bradford-based grocer is launching its online business from a standing start via a technology tie-up with Ocado, after its absence from the web market was partly blamed for slowing sales.

Chief executive Dalton Philips unveiled what Morrisons claims will be a unique web offering focused on making its value and fresh food proposition available to home shoppers using the best delivery system available.

Mr Philips said: "We are late to the party but I am confident we can make quite an entrance."
Customers will have to pay £1, £3, or £5 for deliveries, depending on the time of the day, and each order must be worth at least £40.

Morrisons-trained Ocado drivers will fan out from a delivery centre in Warwickshire to deliver to homes within a one-hour time slot chosen by customers, using yellow Morrisons vans bearing the slogan "From market street to your street".

The supermarket will offer a "refund and replace" promise so that customers can check any fresh food and if it is not up to scratch send it back with the driver without paying for it, while also receiving a voucher for its value to make up for the inconvenience.

The pledge is designed to address the frustration of some online grocery customers about being sent poor quality fresh food such as fruit and vegetables.

Other innovations include wrapping bananas in bubble wrap and mangoes in socks to ensure their
freshness, while flowers and cakes will also be given specially-designed packaging.

First deliveries will be made in Warwickshire from January 10, with Bradford-based Morrisons adding West Yorkshire in February, expanding to London and South Yorkshire in the summer and across the North West during the rest of the year.

Wales, the South West and Scotland will not be reached under the initial roll-out, though Morrisons says it will continue to try to cover as much of the country as economically viable.

Mr Philips said the Ocado deal allowed it to "start in the fast lane" and was a low-risk way of launching its online business.

Morrisons says 32% of its existing store customers already shop online with its rivals. Sainsbury's online annual turnover is now more than £1 billion.

Mr Philips acknowledged that the retailer was "late into this market" but said it "couldn't have moved any quicker" since he took over in 2010.

It has taken on board ideas from US online grocer Fresh Direct as well as lining up its Ocado partnership.

Morrisons is Britain's fourth biggest supermarket but like its rivals is seeing market share decline as discounted Aldi and Lidl grow at the cheaper end of the price range and Waitrose lures better off customers.

Its latest quarterly trading figures showed like-for-like sales slumped 2.4%, attributed to its weakness in online and convenience retailing - as well as subdued consumer confidence.

The company has already entered the convenience market, expanding from 12 last year to an expected 100 by Christmas and 200 by the end of next year.

Morrisons, which employs 132,000 staff at more than 400 stores, announced in May that it had signed a 25-year deal with Ocado to acquire its Warwickshire distribution centre and use its
technology for £170 million.
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