As the only one of the major UK supermarkets without an online web-based order site, it was obvious that Morrisons would open such a facility – question was ‘when would this happen’? And throwing up another challenge – with whom? To everyone’s surprise, Ocado was the favored bidder.
Ever since it was started, Ocado has been tied up with Waitrose. Now is the party season, with BBQs in full swing. The Ocado van delivering to your neighbor was a sure sign that you were going to have good food when you slipped round for the party. Observers are even more surprised that after the acquisition, Morrisons has announced that the new tie-up is going under the Morrisons’ branding – instead of retaining the more up-market Ocado name. Whether your neighbors will be so pleased to see the Morrisons van delivering the party food remains to be seen; Ocado was always seen as an up-market brand; Morrison’s did not have such an up-market reputation.
Implications
The website and delivery vans will be Morrisons branded, with logistical support by Ocado from its Dordon distribution centre in the Midlands. Morrison’s did not have the same reputation. Morrisons says it has agreed a deal that will enable it to launch an online grocery service by January 2014, and, at the moment, they are the only one of the big four chains not to offer online shopping. The retailer says it has agreed a deal that will enable it to launch an online grocery service by January 2014. The website and delivery vans will be Morrisons branded, with logistical support by Ocado from its Dordon distribution centre in the Midlands. Morrisons will make an initial payment of GBP170m to Ocado to acquire the Dordon centre, then a further GBP46m to expand it and establish a delivery network. Chief executive Dalton Philips told BBC Radio 4’s Today program: “This is a very good transaction for both parties. We’re going from a standing start to the fast lane in the blink of an eye.’ Morrisons expects a return on its investment within three or four years, he said. Ocado said its current contractual agreement with Waitrose would “remain unaffected by these arrangements” and that customers would experience “no change to the service” as a result of the deal. It will continue to deliver Waitrose food from the Dordon centre. But before the Morrisons deal was announced, Waitrose managing director Mark Price expressed concern, telling the BBC: “I’ll want to look really closely at that contract to see whether there is any breach of the agreement we have [with Ocado]”. Waitrose signed a deal with Ocado in 2000 and now serves up to 40,000 online shoppers a week. Ocado’s share price surged 42% in early morning trading on news of the deal, but no-one is too sure what will happen when the dust settles – and if Ocado will lose out with the ‘snobbish’ shopper.
Sausages
Everyone’s favorite grilled party food during the summer has to be sausages; everyone loves the taste: inexpensive, and very easy to grill – especially on a BBQ. Waitrose has decided to major on its favorite brand: Duchy Originals, and its Pork sausages are top of favourites (with a hefty price tag), followed up by Cumberland sausages – which are always full of herbs. Standing alongside sausages in popularity are the old staples of finger sandwiches, always popular as the centre offering for English Afternoon Tea. After years in the doldrums, Afternoon Tea has suddenly had a revival, partly due to the popularity of the TV series the great British bake off. Scandal never got in the way of publicity; last year The Great British Bake-off was a runaway success on TV; this year it’s co-presenter Paul Hollywood’s marital problems have ensured he is constantly in the media, and suddenly
Afternoon Tea is THE success story
Finger sandwiches must be the easiest things to make, but in these days of time-poor-cash-rich customers, Marks and Spencer has found its traditional, up-market range of ‘Finger Sandwiches’ – with crusts cut off – is selling well; so has refreshed its range to including chicken, free range eggs, and British beef – no doubt as a strong marketing ploy acknowledging last month’s horse meat scandal. And this old-fashioned classic is flying out the door. There is even a special offer – spend GBP35 and buyers receive a GBP5 voucher. Tesco, the major player on the scene, has been experiencing difficulties recently, and even announced flat sales on the food side and a fall in income on other non-food items. This seems to be the case with other major supermarkets across Europe. Better weather will up the market for entertaining for barbecues and outdoor events, but it remains to be seen if sales will get back to their original heights with the bad weather and the increase in food raw material causing upsets.
Sushi
Supermarkets are following each other’s lead. Popular across the board are faithfuls such as Filo-wrapped prawns, sausage rolls, and sushi products. Sushi is one of the season’s successes, and a pre-trendy party has to have its platter of sushi products to offer to guests. These Japanese treats are the important thing to offer trendy guests these days, and are always greeted with a happy cry. The fact that they look good and are seen to be healthy is a big plus for sales. Meanwhile, as it is said we live in interesting times. And it remains to be seen what the current state of the marketplace will be in even six months time. Store owners can only hope that the market will improve and weather will get better, bringing the shoppers out to buy fruit and vegetables and all the other goodies that help keep the tills ringing.