RE: The DT 01/03/16 re Amzn Mrrsn deal2 Mar 2016 10:42
Tanganyika, interesting tie up between Amazon/Morrisons which could eventually see the end of Morrisons as we know it long term, shrinking estate, reducing market share, no convenience stores to speak of, thrashing about looking for some identity, at least they got online eventually thanks to Ocado. As we know they're now Amazons wholesaler who could actually undercut Morrisons pricing if they so wish, yes they could sell Morrisons veggies cheaper than Morrisons, a great deal eh? Tim Steiner has always said he sees Amazon as Ocado's main threat and now they're here as they don't want to miss the UK party. Should Ocado really be that worried or should it be the big four UK grocers? Sainsburys have seen the danger and gone for Argos which was a smart move imo but they're not there yet. The race is on to shift online, even ALDI are trying it (coughs). The good news for Ocado this week is that Morrisons are now sharing the capacity at Erith (CFC4) next year which means a sharing of the costs involved. I'd like to see some more detail here before I make any further comment on that to see if there's been any dilution to the original agreement. Also the software Ocado are producing for the stores outside of the online area, is this to be licensed, it is a freebie ?
The arrival of Amazon will only speed up the channel shift to online which can only benefit Ocado rather than hinder it. It's the other retailers I fear for as was highlighted in the news this week, 900,000 jobs could be potentially be lost by 2025. The new depot an Andover can't come soon enough for me, this is the party piece Ocado will be selling abroad to enable other retailers to fight off Amazon. As I've said many a time before Ocado have done this the hard way and managed to deliver groceries and make a profit. They now need to expand their non food range and start making some bigger profits which is what Amazon are now here to do.
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