Morrisons has signed a 25-year deal with Ocado to enable it to develop its online grocery home delivery business, using its logistics and technology operations along with a fleet of Morrisons-liveried vehicles.

The supermarket will take on half of Ocado’s warehouse in Dordon, Warwickshire. It will also invest £46m in expanding the site to accommodate Morrisons products, integrate its systems and establish a network of delivery spokes.

Morrisons has paid Ocado an initial sum of £170m to acquire the site and will also pay service costs on an annual basis.  Ocado said the deal will allow it to make better use of warehouse capacity and share costs.

The supermarket expects to launch its home delivery service in January 2014.

Ocado chief executive Tim Steiner said: “We see Morrisons decision to adopt our model to drive its online launch as a further endorsement of or technological and logistical evidence.”

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