Supermarket to roll out grocery deliveries within one hour across more UK cities

Morrisons has expanded its partnership with Amazon for ultra-fast same-day grocery deliveries to more cities across the UK, as it reported a drop in quarterly sales.

The Bradford-based supermarket group said it had signed a multiyear deal with Amazon, which replaces its previous rolling contract, to cover “many more cities across the UK”.

Same-day online grocery home delivery is available to Amazon Prime Now customers in Leeds, Manchester, Birmingham and parts of London and the home counties. Customers can order a full Morrisons shop online and have their goods delivered by Amazon.

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Many customers have an option for delivery within one hour of placing the order. This service, which costs £7.99, will begin to be rolled out to Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth this year, and to other cities across the UK in coming years. Two-hour delivery is free for orders over £40.

Doug Gurr, the Amazon UK country manager, said: “We are committed to growing our grocery business and continuing to innovate and deliver the things our customers will always care about including low prices, vast selection, and fast delivery. Our relationship with Morrisons is an important part of this growth.”

The news came as Morrisons reported a 1.9% fall in like-for-like sales in the three months to 4 August, its second quarter. It was the group’s first quarterly sales decline since 2015, but slightly better than analysts had expected. Last year, sales rose 6.3%, boosted by warm weather, the World Cup and the royal wedding.

David Potts, the chief executive, said Brexit uncertainty had dragged down consumer confidence. “Consumers are quite careful and savvy right now. Their confidence in the economy has taken a battering.”

Morrisons has cut prices on 200 basic goods such as eggs, carrots, potatoes, meat, fish, cleaning cloths and biscuits, and he said there were more reductions to come.

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Potts also said although he had seen no evidence of customers stockpiling in the run-up Brexit, the company was preparing “for all eventualities” by increasing stocks of some products and packaging for the foods it manufactures before the 31 October departure date.

The date is “not ideal” as it coincides with the end of the British fruit and salad growing season, which means more fresh produce will need to be imported from continental Europe, just as warehouses are filled before Christmas. But Potts said Morrisons was in a better position than others because two-thirds of its products came from Britain.

The group made a half-year profit before tax and one-off items of £198m, up 5.3% from a year earlier. It is paying a special dividend of 2p a share. Morrisons shares rose more than 3% to 200p in morning trading on Thursday.