Online supermarket Ocado will no longer be Morrisons’ exclusive digital partner, the companies have announced.
The mutually agreed decision will provide Ocado with the entirety of its previously shared Erith customer fulfilment centre (CFC) until January 2021 in order to recover from a fire at its Andover warehouse in February.
During this time, Morrisons will look for new business opportunities and plans to increase its strategic flexibility and growth with other providers before returning.
After the 2016 deal with Ocado to increase its home delivery services, it now accounts for over 10,000 orders per week at Erith and has the right to 30 per cent of CFC4’s future order capacity.
On its return in 2021, the companies expect its Erith warehouse to be operating at a higher capacity, and Morrisons will then be able to ramp-up its online offer more quickly and cost effectively.
Morrisons reports that certain exclusivity provisions for Ocado will also be relaxed.
During the intervening period, Morrisons will not incur either the start-up or running costs of the new warehouse.
“Morrisons is a valued partner of Ocado and we are glad that we have been able to come to an equitable and pragmatic agreement that is in the interests of both parties,” said Tim Steiner, CEO of Ocado.
“We look forward to welcoming Morrisons back to Erith in February 2021.”
David Potts, CEO of Morrisons, added:” We are pleased to be helping our partner in times of need after the recent fire.
“We will keep growing Morrisons.com for our customers and save some cost, returning to the Erith CFC when it is more mature.
“Our new agreement allows us to have more than one digital partner, and opens the way for significant potential opportunities and partnerships in this important growth area for Morrisons.”