Morrisons and Ocado announce online grocery deal

Morrisons has today (May 17th) announced it has reached an agreement with Ocado to establish an online grocery delivery service.

Currently, it is the only of the big four UK supermarkets that does not offer an internet shopping facility, which has seen rivals Asda, Tesco and Sainsbury's pull away from the company.

It is to acquire Ocado's West Midlands distribution centre for £170 million and will pay a further £46 million to expand it as it looks to create a comprehensive delivery network.

According to the supermarket, it will see a return on investment within three to four years.

Dalton Philips, chief executive at Morrisons, said: "I'm confident that Morrisons.com will grow over time to be an operation of real scale and significance whilst creating meaningful long-term value for Morrisons shareholders."

However, Ocado has an existing contract with Waitrose, which said it would be "looking very carefully" at this deal to see if it breaches the agreement the two parties signed in 2000.

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