Ocado shares took a tumble today as Morrisons announced a new store-picking service with Amazon Fresh.

The supermarket’s tie-up with Amazon, available initially to Prime members in selected London and Hertfordshire postcodes, will allow customers to do a “full” Morrisons shop through Amazon.

Customers are able to choose from delivery within an hour, at an additional cost of £6.99, or a choice of two-hour delivery slots for free.

While it started supplying some products to Amazon in June, Morrisons has been long-affiliated with online grocery delivery service Ocado, which saw its share prices fall by 6% this morning.

However a statement from Ocado said that its work with the company would remain intact.

“Although we are not aware of the details, we have been assured by Morrisons that they acknowledge and respect the exclusivity provisions in our agreement, which oblige Morrisons to operate their online grocery business only through the Ocado arrangements,” the grocer said.

Ocado added that it was working on the creation of its own store-pick solution with Morrisons.

Morrisons chief executive David Potts said the new service was capital-light for the supermarket, but offered strong profit opportunities.

He said: “As food maker and shopkeeper, we have unique skills to help build a broader new Morrisons through capital light growth.

“Morrisons at Amazon is another exciting joint opportunity and makes Morrisons good quality, great value-for-money products available to even more customers."

Amazon has been making its mark on the grocery home delivery sector in the last year, with the launch of ambient goods service Amazon Pantry last November, followed by the launch of its Fresh service in the UK earlier in June.

Topics