Morrisons on track for January online launch

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Morrisons is on track to launch its online food proposition in January, the retailer said in the interim results for the half year to 4th August.

In May, it signed a deal with Ocado to use the Dordon logistics centre in the Midlands for the service.

It has also been investing in its M local store network. Dalton Philips, chief executive, said: “By the end of the year we will have 100 M local convenience stores, around half of which will be in London and the South East, and we’ve secured a new distribution centre in Bury to support our convenience stores in the North.

“In parallel we’ve been working at pace on our online offer; the final pillar of our strategy. will be making home deliveries of our great fresh food by the end of January 2014, supported through our long term service agreement with Ocado.”

While Morrisons has been investing in its multi-channel offer, it has seen flat sales in its store network and reported a ten per cent fall in underling profit to £401m for the first half.

Ocado is also looking forward to the start of the Morrisons service.
In its interim management statement, the company said the sale and leaseback arrangements of Dordon Customer Fulfilment Centre to Morrisons had been completed, “resulting in payments of £138.3m under the arrangements and the full repayment of bank facility”.

Chief executive officer Tim Steiner said: “During the period, we successfully completed our agreement with Morrisons. We now look forward to the launch of this business in early 2014, firmly endorsing our operating model and IP for online grocery services.”

The ramp up of CFC2 was progressing well, the company said, with commencement of phase 2 development to facilitate the Morrisons arrangements.

Ocado saw its gross sales for the 12 week to 11 August rise 16.4 per cent to £189.2m.

“We are encouraged by the continuing momentum in sales growth, reflecting an increase in both orders and basket size,” said Steiner. “We remain focused on improving the proposition to customers to make it easier for consumers to shop at Ocado, from an ever wider range, and at competitive prices. This should support further growth as the demand for online grocery shopping continues.”

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