June 13, 2019 / 6:51 AM / 12 days ago

Amazon and Morrisons extend same-day food delivery to more UK cities

The logo of Amazon is seen at the company logistics centre in Boves, France, January 19, 2019. REUTERS/Pascal Rossignol

LONDON (Reuters) - U.S. online retailer Amazon and British supermarket group Morrisons are extending their “Morrisons at Amazon” same-day online grocery delivery service to more cities across Britain.

The service, currently available to Amazon’s Prime Now customers in Leeds, Manchester, Birmingham and parts of London, will be rolled out to Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth this year, the companies said on Thursday.

It allows Amazon Prime customers to order a full Morrisons shop online, which is then picked at a local store, and delivered by Amazon, with an option for delivery within one hour of the order being placed in some locations.

The service will be expanded to more British cities in future, the companies said.

Morrisons, Britain’s fourth-biggest supermarket group behind Walmart’s Asda, Sainsbury’s and market leader Tesco, also provides food in a wholesale deal for Amazon’s “Fresh” and “Pantry” grocery offers.

The U.S. online giant has gradually extended its food offer in Britain, but according to market researchers Kantar Worldpanel, its market share is still less than 1%.

Shares in Morrisons were up 1.5%, outperforming a weak sector after a trading update from Tesco showed sales growth slowing. Tesco’s shares were down 2%, while Sainsbury’s was down 0.5%.

Jefferies analyst James Grzinic said that, given the urban skew of Prime Now customers, the tie-up would provide an opportunity for Morrisons to increase sales in parts of Britain where it is under-represented.

Editing by Jane Merriman; Editing by Mark Potter

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