This deal May cause complications for Ocado but Amazon assault on the UK grocery sector which is not materialised. Share of Morrison’s Up by 4% and share of Ocado’s down by 9%.
It is not easy to argue with snap judgment market on their strategy of monday which shuffles in the online grocery market. The chief executive David Potts of Morrisons has signed a deal with Amazon to supply hundreds of fresh frozens and ambient products.
On the principle that it is better to be cuddly with the Amazonian monster, rather than stand in its path, Morrisons is being pragmatic, as benefits a company that was late to the online game. Morrisons itself a major supermarket which produces a lot of its own grub, by owing farms and manufacturing facilities. Arguably, that alters the economics of a tie-up with amazon.
As Manufacturer and wholesakler Morrisons can hope for making profits on its Amazon lines even if it is surrendering the retailer’s profit margin.For the rest of the supermarket sector, the main important question is wheather Amazon is getting serios for their groceries in the UK ot not. The addition of hundreds- but not thousands of Morrisons lines is an upgrade but not a game changer. The serious assault is still awaited but not t