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Image: Customers shopping at Morrisons Supermarket. Shutterstock

If Amazon Acquires Morrisons, a Supermarket War Could Result, Say Analysts

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Image: Customers shopping at Morrisons Supermarket. Shutterstock

Amazon already provides U.K. consumers with Morrisons food deliveries using Pantry and Prime.

Should the ecommerce giant acquire the grocery chain, it may spark another supermarket war.

Morrisons’s Strategy

Morrisons customers can already purchase groceries to be delivered through Amazon. This is possible through the Pantry and Prime services. That said, Morrisons has managed to keep its own strategy in place, with considerable success. This year, the company stands to reach £700 million in sales through its wholesale business.

That said, it isn’t impossible that Amazon may make a bid to purchase Morrisons. This would present a considerable challenge to the U.K. grocery market, say analysts.

Supermarket Mergers

Marketing firm TCC Global’s global insight director, Bryan Roberts, commented on a Morrisons trading update, praising the company’s solid performance. That said, he underscored that groceries sector mergers could lead to a tie-up with Amazon.

“Investors will be nervous about the growing threat from consolidation in the grocery market following the recent slew of mega mergers, with the planned deal between Sainsbury’s and Asda announced last week and Tesco and Booker earlier in the year,” said Roberts. “But Morrisons’s own strategy is bearing fruit, with its wholesale business on track to reach £700m in sales this year.”

Possible Amazon Takeover Bid

Roberts speculated that “a takeover bid from Amazon is not beyond the realms of possibility.” He added that this could be a step for Amazon as it works to grow its presence in the U.K. He underscored that Amazon has already been looking into this type of move, as was demonstrated last year when it attempted to purchase Waitrose.

Others in the industry have speculated that both Morrisons and Sainsbury’s could end up being potential targets for an Amazon takeover. That said, the ecommerce giant has taken only small steps into the U.K. grocery industry so far. As Asda and Sainsbury’s are now aligned for a massive £13 billion merger, this makes Morrisons a top contender for Amazon’s interest.

Morrisons has now become both a retailer and a wholesaler after it entered into an exclusive deal with McColl’s convenience stores to supply all 1,000 locations. The company recently explained that its unique position as a “food maker as well as a shopkeeper,” has given it the opportunity to enter into direct deals with growers and farmers.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.