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* Ocado boosted by hopes for renewal of Morrisons deal
* Amazon also targeting UK online food retail (Adds CFO comments, analyst comments, share price)
By Sarah Young
LONDON, March 15 (Reuters) - Ocado said it expectedto renew a deal with Morrisons this year even though itskey customer has reached a supply agreement which will allowAmazon to expand into online food retail.
Ocado, which as well as providing supermarket groupMorrisons with online services also sells products supplied byupmarket chain Waitrose, said last month that it was intalks with Morrisons to renegotiate a deal struck in 2013.
The amendments sought by Morrisons were disclosed on thesame day it announced a major tie-up to supply U.S. online giant Amazon with groceries, raising questions about the futureof its relationship with Ocado.
Morrisons is using Ocado to distribute its online products.Morrison's separate deal with Amazon is a wholesale agreementwhere Morrisons will supply Amazon with its products and Amazonwill control how much it charges customers for them.
Ocado said on Tuesday that the new Morrisons agreement wason course to be finalised, reassuring investors over a tie-upwhich Shore Capital analysts have called "critical to Ocado'sfuture".
Ocado's Chief Financial Officer Duncan Tatton-Brown toldreporters that the deal would be finalised "relatively soon".
"Don't think it's going to be the end of the year before weannounce something," he said. "Lawyers need to put that intocontracts and that takes some time but everything's progressingas we would expect."
Morrisons had said in February that there was no certaintyan agreement would be concluded.
Founded by three former Goldman Sachs bankers in 2000, Ocadohas divided opinion like few other stocks. Some view its homedeliveries from giant distribution centres as the future ofgrocery shopping. Critics regard it as a costly and complicatedventure that will never make sustained profits.
Shares in Ocado traded 3.3 percent higher at 270.5p at 1025GMT after the company also posted a 13.8 percent rise in grossretail sales in the 12 weeks to Feb. 21 compared to the sameperiod last year, a performance praised by analysts.
"We believe this implies gradual market share gains atOcado.com," Jefferies analysts said, who have a "hold" rating onthe stock, adding that details of how the deal with Morrisonswould change would be material for the group.
Ocado is also looking to sign a deal with an internationalretailer to provide it with services linked to its coreexpertise of automated warehouses, but it missed out on itstarget of securing a first one in 2015.
Tatton-Brown repeated that he remained confident aboutsecuring a new partner.
"Our confidence levels have not changed at all. We continueto talk to multiple parties," he said. (Reporting by Sarah Young, additional reporting by James Davey;editing by Keith Weir)
