Instead of taking the UK's supermarkets head-on, Amazon has decided to ally with them in order to boost the popularity of its Pantry service. The site, launched in November last year, allows Prime subscribers to remotely order more than 4,000 products with next-day delivery. Now, it's announced a deal with Morrisons -- a heavyweight supermarket in the UK -- that will add "hundreds" of new products to its platform. They'll also be available through Prime Now, a one-hour delivery service that's available in a smattering of cities. Morrisons says the new additions will appear on Amazon "in the coming months" and include fresh and frozen goods.
The partnership should benefit both companies. For Amazon, it's a chance to quickly expand the number of products available through Pantry, thereby making it more useful and a viable replacement for supermarket sites. With a brand that customers recognise, the deal should also encourage new customers to sign up for Prime and try the delivery service. For Morrisons, it's a new way to sell its wares as a wholesale provider, while handing off the responsibility of managing an online platform.
Morrisons has its own site, but at the moment all of its orders are fulfilled by Ocado, a UK specialist in supermarket deliveries. The two are locked in a 25-year deal but an "amended agreement" announced today could change the terms. Morrisons wants to grow its own website and the new pact means that it can take out space in Ocado's new customer fulfilment center in Erith, southeast London. Alongside the Amazon deal, these are small but important moves that could make Morrisons more competitive with some of the UK's other supermarket giants, like Asda and Tesco.