UK supermarket chain Morrisons has purchased a small stake in an US online grocery retailer as part of its bid to build a profitable e-commerce business.
The company will buy a 10% stake in New York’s FreshDirect for £32 million, it announced today as part of its preliminary results announcement. The deal follows its £70 million acquisition of Kiddicare.com, a UK-based online childcare equipment vendor, last month.
These acquisitions will “help us to learn from the very best, and get us going,” the company said in a statement. “We believe as a result we will get to the right answers faster in both grocery and non-food Internet retailing.”
Morrisons has come late to the online retail sector, but is now committed to sell both food and non-food products through its website within the next two years. “We [are] convinced that Morrisons should be transacting online, as our customers wish us to offer this option,” it said today.
But it added that this is no trivial task. “Our research has shown that to do this effectively has significant challenges and that building such capabilities from scratch takes time,” it said.
“We don’t believe anybody is making money online today in the UK,” Morrisons CEO Dalton Philips told Sky News today.
When it announced the Kiddicare acquisition, Morrisons made special mention of its technology platform as motivation for the deal. “This acquisition brings not only a respected, successful and fast growing specialist retailer into the Morrisons group but also a robust, scalable and highly advanced technology platform around which we can begin to build our e-commerce offer,” Philips said at the time.