1405 Tuesday 11 December 2018

In a day that has been full of supermarket news, stories are circulating this afternoon that US tech giants, Amazon, are in the frame to purchase UK chain WM Morrisons. The story began in the Financial Times Alphaville chatroom, but have gained traction and since sent shares in MRW.L from negative territory to being up 3% at one point. Stock in Amazon was also up 2.5% in pre-market trading.

On closer analysis, such an acquisition does make operational sense from Amazon’s point of view. Not only do they already have a logistical partnership with Morrisons via the Amazon Pantry section of their .co.uk site, but they have also been experimenting with the supermarket model in the US. Amazon Go are cashier-less stores that have been tested by the tech giant in 7 US locations. Customers are required to have the Amazon app installed and their purchases are logged automatically as they shop around the store and then their accounts are charged automatically as they leave the store. News broke yesterday that they plan to take the concept to London next year and plan 3000 total stores by 2021.

Given the pre-existing relationship that Amazon and Morrisons have, plus their physical shop experimentation, this could be a story that has legs and is worth following closely.

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