Sainsbury’s-Morrisons merger.14 Feb 2017 12:48
Is this old news or a real possibility? Any thoughts to this piece below in UK haulier?
The e-delivery specialists ParcelHero says the potential merger, speculated this week by Meryl Lynch, would lead to a delivery revolution; by bringing three leading e-commerce platforms – Amazon, Argos and Ocado – into a combined relationship with the merged supermarket chain.
After his retirement in 2008 Sir Ken Morrison was notably outspoken about the future of the company he founded, calling one Chief Executive’s turnaround plans ‘disastrous’ and ‘bullshit’. Says David Jinks MILT, Head of Consumer Research at ParcelHero: ‘Had he opposed the plan, Ken Morrison would have undoubtedly let his views be known; and Ken’s family still own 9% of shares in the company. Following the planned Tesco merger with food distributor Booker, Sainsbury’s and Morrisons will be looking for similar economies of scale; and the two events this week make the tie-up more likely.’
Adds David: ‘Sainsbury’s owns the resurgent multi-platform retailer Argos – whose Same Day delivery service has shaken up UK retail. Morrisons works hand-in-glove with web-based grocers Ocado; and with Amazon – which uses Morrisons for its one hour Amazon Prime Now food deliveries. The combined “Morribury’s” supermarket would have access to the very best delivery technology; enabling it to offer both groceries and home and general merchandise in a huge variety of different delivery options.’
David explains: ‘As well as Sainsbury’s and Morrisons’ existing logistics operations, the potential bringing together of Ocado, Argos and Amazon presents huge home delivery opportunities. Despite repeated conjecture of an Ocado-Amazon merger the three leading digital retailers have always been rivals. For the three to be pushed into collaboration is exciting for the future of food and goods retailing and deliveries. The potential to have all our produce and consumer goods ordered and delivered same day, or even one hour, would be a godsend for busy shoppers.’
Concludes David: ‘ParcelHero’s new industry report, 2030; The Death of the High Street, reveals home shopping will wipe out over 50% of town centre stores, and spell the end for many High Street supermarkets by 2030. The report shows town centre brick and mortar supermarket’s market share will slump from 42% to 24% by 2030: and that’s not enough to remain viable. Superstores rely on volume because of their small margins. A radical solution is needed that knits physical stores and e-commerce together. For Sainsbury’s and Morrisons this combined offering with the three major online payers looks like being the answer’.
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