Morrisons have signed a deal to sell food to the online US giant Amazon, supplying products for the Amazon Prime Now and Amazon Pantry services.
Last year Amazon expanded their service by introducing their Amazon Pantry and in November they launched a packaged groceries offer for Amazon Prime members who pay £79 annually.
Although this service increased supermarket competition Amazon couldn’t offer fresh food until it’s recent deal with Morrisons.
Under the new deal, Morrisons will supply fresh, frozen and non-perishable goods to Amazon customers.
The supermarket hopes to expand their online presence by making this deal with Amazon, who have a net income of 596 million USD.
The supermarket industry has faced fierce competition in recent years so Morrisons hope to get the public attention by this new sales technique.
The supermarket have stated that the deal will only go ahead if the trial period makes notable profits and details of the deal are still being agreed so are subject to change.
Amazon is unlikely to undercut the food prices too much because Morrisons have noted they want to see the benefits of growth from this deal.
However, interestingly Amazon will be able to choose which Morrisons products it sells and their price because the agreement is a standard wholesale deal between a retailer and supplier.
Amazon hopes to supply a range of products to make its food service successful but the exact food list is yet to be confirmed.
It is likely to include spaghetti, soup, chocolate and fruit juices, with the supermarket also making a recent deal with online grocer Ocado.
Morrisons’ share price was up nearly 5% and the biggest riser on the stock market on Monday morning, following the announcement of its two online retail deals.
Could this be the beginning of a new supermarket sales platform?