Amazon set to enter British fresh food market after striking supply deal with supermarket Morrisons

Amazon set to enter British fresh food market after striking supply deal with supermarket Morrisons

Online retailer Amazon will make entry in the British fresh food market after a supply deal with supermarket Morrisons. The move will probably ramp up fight in the already cut-throat sector.

On Monday, Britain's fourth biggest supermarket Morrisons said that the pact would let Amazon Prime Now and Amazon Pantry customers avail Morrisons ambient, fresh and frozen products in the coming times.

In the recent years, the British supermarket sector has already been shaken by fierce competition, and analysts have cautioned that a step up from Amazon may badly harm the traditional players.

Amazon came up with a packaged groceries offer in November for Amazon Prime members, paying a yearly fee of 79 pounds.

That was Amazon’s most ambitious attack on the Britain's growing online grocery market. However, it stopped short of imitating its broader US Amazon Fresh service, offering nearly 20,000 chilled, frozen and fresh products and items belonging to local shops.

Retail analysts have guessed that the US Company was getting all set for a launch of Amazon Fresh in Britain in 2016.

Morrisons Chief Executive David Potts said that the combination of their fresh food expertise and the online and logistics potential of Amazon is compelling.

Potts added, “This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business. We look forward to working with Amazon to develop and grow this partnership over the coming months”.

Presently, the British grocer has an online supply agreement with retailer Ocado. It said on Monday that it has reached a deal in principle with Ocado to improve offerings on Morrisons.com.

The pact will see Morrisons taking a position in Ocado’s new distribution center, or customer fulfillment center (CFC), in Erith, south east London, and Ocado coming up with a store pick solution for Morrisons that leverages its technology and stores of Morrisons. On implementation, the deal would extend Morrisons' online reach to the entire UK.

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