346 lines
13 KiB
Plaintext
Executable File
346 lines
13 KiB
Plaintext
Executable File
finance
|
|
newsbysector
|
|
retailandconsumer
|
|
8374488
|
|
-----
|
|
# Morrisons to start selling food online, from Bradford via New York
|
|
|
|
## Supermarket's £32m fact-finding mission to America is an eccentric but
|
|
bold move, writes James Hall.
|
|
|
|
![Morrisons to start selling food online, from Bradford via New York][1]
|
|
|
|
Setting out his stall: Morrisons' chief executive Dalton Philips plans to
|
|
rival Ocado's online service, right
|
|
|
|
[![James Hall][2]][3]
|
|
|
|
By [James Hall][4], Retail Editor 6:15AM GMT 11 Mar 2011
|
|
|
|
[Comments][5]
|
|
|
|
When _The Telegraph_ interviewed Richard Braddock last summer, the chief
|
|
executive of New York food website FreshDirect was less than complimentary
|
|
about Ocado, its closest UK equivalent.
|
|
|
|
Speaking from FreshDirect's US HQ about Ocado's then-recent IPO, Mr Braddock
|
|
said that Ocado's costs were too high and that its business model "doesn't
|
|
feel good in terms of profitability."
|
|
|
|
"This is the first time that really hard questions about their model have been
|
|
asked," he added. (At the time Ocado, which has since made a profit, dismissed
|
|
the criticism).
|
|
|
|
But just seven months later the tables have turned.
|
|
|
|
On Thursday Wm Morrison, the Yorkshire-based grocer, said that it had spent
|
|
£32m buying a 10pc stake in FreshDirect. The reason? To learn how to make
|
|
money from selling food over the internet.
|
|
|
|
## Related Articles
|
|
|
|
* [How much food do Britons really buy online? - in graphs][6]
|
|
|
|
11 Mar 2011
|
|
|
|
* [Wm Morrison ends 'solid' year with 1bn buyback][7]
|
|
|
|
11 Mar 2011
|
|
|
|
* [FreshDirect: New York's friendly grocer][8]
|
|
|
|
11 Mar 2011
|
|
|
|
* [Morrisons tie-up could be one in the eye for Ocado's embattled bosses][9]
|
|
|
|
11 Mar 2011
|
|
|
|
* [Online grocery sales 'will double within five years'][10]
|
|
|
|
11 Mar 2011
|
|
|
|
* [Retailers stoke fears of spending downturn][11]
|
|
|
|
10 Mar 2011
|
|
|
|
Morrisons will send a team of around a dozen employees from Bradford to Long
|
|
Island City in Queens, New York, for the remainder of this year to scrutinize
|
|
how FreshDirect works. Then, in 2013 Morrisons plans to launch its own food
|
|
delivery website in London based on its findings. It is fair to assume that
|
|
"really hard questions" will be asked about the model that Morrisons settles
|
|
on.
|
|
|
|
News of Morrisons' assault on the London online food market comes at an
|
|
interesting time. Figures released on Thursday from the Institute of Grocery
|
|
Distribution predicted that the value of online grocery shopping in the UK is
|
|
forecast to double to £9.9bn by 2015. This week supermarket Waitrose unveiled
|
|
a £10m revamp of its website prior to launching a home delivery service within
|
|
the M25, a service that will pitch it head-on with Ocado, the rival operator
|
|
that also sells Waitrose products. Add into the mix expanding delivery
|
|
services from Tesco, Asda and J Sainsbury, and London is set to become a web
|
|
grocery battleground.
|
|
|
|
It is a long way from the Yorkshire Dales to New York both geographically and
|
|
conceptually, but Dalton Philips, Morrisons' chief executive, was effusive
|
|
about the FreshDirect deal on Thursday and how it will help Morrisons break
|
|
London.
|
|
|
|
"We have not seen a better execution of online operations anywhere in the
|
|
world," he said. He and Richard Pennycook, Morrisons' finance director, have
|
|
visited New York several times since last October to secretly scope out
|
|
FreshDirect ahead of Thursday's deal. The duo went on the hunt themselves
|
|
having sat through 17 fruitless management consultant pitches here in the UK
|
|
about how to sell food online.
|
|
|
|
"It was quite obvious that we'd have to cast the net wider than the UK," said
|
|
Mr Philips.
|
|
|
|
He was as scathing as Mr Braddock about the existing big UK online retailers:
|
|
Ocado, Tesco, J Sainsbury and Asda. "We don't believe anyone in the UK has
|
|
cracked fresh food online," he said.
|
|
|
|
FreshDirect was founded in 1999 and reached profitability a few years ago. It
|
|
delivers food - which it makes or sources itself - to the so-called tri-state
|
|
area: New York's five boroughs, New Jersey and Connecticut. It serves over
|
|
600,000 customers. Sales in 2010 were forecast to be $300m (£187m).
|
|
|
|
Mr Philips, who will join the FreshDirect board, said that the big pull was
|
|
FreshDirect's focus on customer service and fresh food: "You want a four inch
|
|
topside steak and your partner wants a three inch fillet you can order it
|
|
online for the next day... The site just romances you."
|
|
|
|
Mr Pennycook said that FreshDirect has the "scars on its back" from its long
|
|
slog to profitability, meaning that Morrisons won't have to go through the
|
|
pain itself.
|
|
|
|
But questions were being asked on Thursday about just what Morrisons has got
|
|
for its £32m investment. The company admitted that it has not bought the right
|
|
to use FreshDirect's IT platform nor have access to its intellectual property.
|
|
Rather, it has bought the right to send a team in with "clipboards", to watch,
|
|
to learn and to come back here and implement.
|
|
|
|
Mr Pennycook argued that the cost of the stake and the £70m that Morrison paid
|
|
for online baby product company Kiddicare.com earlier this year is the cost of
|
|
just three new physical stores.
|
|
|
|
In embarking on its New York odyssey Morrisons is taking a somewhat eccentric
|
|
and roundabout route to selling food online. But if it works it will be £32m
|
|
well spent.
|
|
|
|
[**![][12] **][13]**[Retail vacancies][14] at [Telegraph Jobs][13] **
|
|
|
|
[**![][15] **][14]
|
|
|
|
[X][16] Share & bookmark
|
|
|
|
Delicious Facebook Google Messenger Reddit Twitter
|
|
|
|
Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
|
|
|
|
[What are these?][17]
|
|
|
|
* Share: [Share][16] [ ][18] [ ][19]
|
|
|
|
[Tweet][20]
|
|
|
|
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8374488
|
|
/Morrisons-to-start-selling-food-online-from-Bradford-via-New-York.html
|
|
|
|
Telegraph
|
|
|
|
## [Retail and Consumer][21]
|
|
|
|
* ### [Finance »][22]
|
|
|
|
* ### [News by Sector »][23]
|
|
|
|
* ### [Morrison (Wm) Supermarkets »][24]
|
|
|
|
* ### [Business Latest News »][25]
|
|
|
|
* ### [Food and Drink News »][26]
|
|
|
|
In finance
|
|
|
|
[![Burberry Store at Sparkle Roll Beijing, China][27] ][28]
|
|
|
|
### [Inside Burberry's new Beijing store][28]
|
|
|
|
[![The top ten biggest-selling grocery brands in the UK ? in pictures][29]
|
|
][30]
|
|
|
|
### [Britain's top ten brands - in pictures][30]
|
|
|
|
[![][31] ][6]
|
|
|
|
### [How much food do Britons really buy online? - in graphs][6]
|
|
|
|
[![][32] ][33]
|
|
|
|
### [Top 10 retail stories of 2010][33]
|
|
|
|
### [Retail vacancies at Telegraph Jobs][34]
|
|
|
|
[X][16] Share & bookmark
|
|
|
|
Delicious Facebook Google Messenger Reddit Twitter
|
|
|
|
Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
|
|
|
|
[What are these?][17]
|
|
|
|
Share:
|
|
|
|
* [ ][16]
|
|
|
|
* [ ][18]
|
|
|
|
* [ ][19]
|
|
|
|
* [Tweet][20]
|
|
|
|
* Advertisement
|
|
|
|
![][35]
|
|
|
|
telegraphuk
|
|
|
|
Please enable JavaScript to view the [comments powered by Disqus.][36] [blog
|
|
comments powered by Disqus][37]
|
|
|
|
Advertisement
|
|
|
|
[Market Data »][38]
|
|
|
|
Finance Most Viewed
|
|
|
|
* TODAY
|
|
|
|
* PAST WEEK
|
|
|
|
* PAST MONTH
|
|
|
|
1. [Britain faces bleak two years after feeble economic growth][39]
|
|
|
|
2. [Look, even Sweden charges for healthcare][40]
|
|
|
|
3. [BMW blames speculators as aluminium costs rise][41]
|
|
|
|
4. [US consumers in spending retreat][42]
|
|
|
|
5. [Google sued by PayPal in Silicon Valley's mobile war][43]
|
|
|
|
1. [What happens when Greece defaults][44]
|
|
|
|
2. [Dominique Strauss-Kahn: DNA samples confirm sperm traces on maid's
|
|
dress][45]
|
|
|
|
3. [It's ever more obvious, Greece must leave the euro][46]
|
|
|
|
4. [Dominique Strauss-Kahn: new claims of sexual misconduct add to pressure
|
|
on former IMF chief][47]
|
|
|
|
5. [How the euro crisis end game might look][48]
|
|
|
|
1. [What happens when Greece defaults][44]
|
|
|
|
2. [Dominique Strauss-Kahn: IMF head 'hired prostitutes from Manhattan
|
|
madam'][49]
|
|
|
|
3. [Dominique Strauss-Kahn: DNA samples confirm sperm traces on maid's
|
|
dress][45]
|
|
|
|
4. [A tax-based alternative to the Alternative Vote][50]
|
|
|
|
5. [Dominique Strauss-Kahn: maid experienced 'extraordinary trauma'][51]
|
|
|
|
Advertisement
|
|
|
|
Classified Advertising
|
|
|
|
* [Retail Jobs][52]
|
|
|
|
* [FMCG Jobs][53]
|
|
|
|
* [Shopping][54]
|
|
|
|
Loading
|
|
|
|
[Find your ideal job with Telegraph Jobs][55]
|
|
|
|
var puffArray = eval('puffs_' + '8254875'); var guid = "668252"; var headline
|
|
= "HEAD OF MERCHANDISING"; var description = "East Midlands On Application";
|
|
var link = "http://jobs.telegraph.co.uk/job/668252/permanent/east-midlands
|
|
/head-of-merchandising-job-vacancy.aspx?FromRSSFeed=-1012&WT.ac=668252"; var
|
|
imageUrl = "http://jobs.telegraph.co.uk/logos/C4/8D/C4AAFEFC-7EB2-4BDB-
|
|
88A9-8684ADC6B38D_140_87-v2.jpg"; var adWeight = "1";
|
|
puffArray.push({'id':guid, 'headline':headline, 'bodyText':description,
|
|
'link':link, 'imageUrl':imageUrl, 'weight':adWeight}); var puffArray =
|
|
eval('puffs_' + '8254875'); var guid = "670199"; var headline = "Finance
|
|
Manager"; var description = "Central On Application"; var link =
|
|
"http://jobs.telegraph.co.uk/job/670199/permanent/central/finance-manager-job-
|
|
vacancy.aspx?FromRSSFeed=-1012&WT.ac=670199"; var imageUrl =
|
|
"http://jobs.telegraph.co.uk/logos/AC/39/ACC73A67-2B07-46BD-
|
|
B6C6-AA46EABD8839_140_87-v2.jpg"; var adWeight = "1";
|
|
puffArray.push({'id':guid, 'headline':headline, 'bodyText':description,
|
|
'link':link, 'imageUrl':imageUrl, 'weight':adWeight}); var puffArray =
|
|
eval('puffs_' + '8254875'); var guid = "669945"; var headline = "Online
|
|
Customer Support Advisor -Luxury Fashion Brand"; var description = "Central
|
|
London / West End, London £15000"; var link =
|
|
"http://jobs.telegraph.co.uk/job/669945/permanent/central-london-west-end-
|
|
london/online-customer-support-advisor-luxury-fashion-brand-job-
|
|
vacancy.aspx?FromRSSFeed=-1012&WT.ac=669945"; var imageUrl =
|
|
"http://jobs.telegraph.co.uk/logos/6F/0E/6F2FB65C-3EC1-481F-
|
|
9F40-5CA67946880E_140_87-v2.jpg"; var adWeight = "1";
|
|
puffArray.push({'id':guid, 'headline':headline, 'bodyText':description,
|
|
'link':link, 'imageUrl':imageUrl, 'weight':adWeight}); var puffArray =
|
|
eval('puffs_' + '8254875'); var guid = "636596"; var headline = "Business
|
|
Manager - Perfume & Cosmetics"; var description = "Middle East £100000"; var
|
|
link = "http://jobs.telegraph.co.uk/job/636596/permanent/middle-east/business-
|
|
manager-perfume-cosmetics-job-vacancy.aspx?FromRSSFeed=-1012&WT.ac=636596";
|
|
var imageUrl = "http://jobs.telegraph.co.uk/logos/D6/B5/D60A68F0-B65F-4150-A30
|
|
7-98715C2C45B5_140_87-v2.jpg"; var adWeight = "1"; puffArray.push({'id':guid,
|
|
'headline':headline, 'bodyText':description, 'link':link, 'imageUrl':imageUrl,
|
|
'weight':adWeight}); var puffArray = eval('puffs_' + '8254875'); var guid =
|
|
"675479"; var headline = "Store Manager"; var description = "Sunnyvale,
|
|
California On Application"; var link =
|
|
"http://jobs.telegraph.co.uk/job/675479/permanent/sunnyvale-california/store-
|
|
manager-job-vacancy.aspx?FromRSSFeed=-1012&WT.ac=675479"; var imageUrl =
|
|
"http://jobs.telegraph.co.uk/_resx/images/TGJobs-logo_140x87-v2.gif"; var
|
|
adWeight = "1"; puffArray.push({'id':guid, 'headline':headline,
|
|
'bodyText':description, 'link':link, 'imageUrl':imageUrl, 'weight':adWeight});
|
|
var puffArray = eval('puffs_' + '8254875'); var guid = "671870"; var headline
|
|
= "Group Chief Executive GCE/324/41"; var description = "South East £270000";
|
|
var link = "http://jobs.telegraph.co.uk/job/671870/permanent/south-east/group-
|
|
chief-executive-gce-324-41-job-vacancy.aspx?FromRSSFeed=-1012&WT.ac=671870";
|
|
var imageUrl = "http://jobs.telegraph.co.uk/logos/64/6E/643CA70F-
|
|
BCF4-4C58-9A37-46A42236F76E_140_87-v2.jpg"; var adWeight = "1";
|
|
puffArray.push({'id':guid, 'headline':headline, 'bodyText':description,
|
|
'link':link, 'imageUrl':imageUrl, 'weight':adWeight}); var puffArray =
|
|
eval('puffs_' + '8254875'); var guid = "644885"; var headline = "Financial
|
|
Accountant"; var description = "Manchester £35000 - £40000"; var link =
|
|
"http://jobs.telegraph.co.uk/job/644885/permanent/manchester/financial-
|
|
accountant-job-vacancy.aspx?FromRSSFeed=-1012&WT.ac=644885"; var imageUrl = "h
|
|
ttp://jobs.telegraph.co.uk/logos/85/E2/855590C3-9CCF-4576-A420-F383A84635E2_14
|
|
0_87-v2.jpg"; var adWeight = "1"; puffArray.push({'id':guid,
|
|
'headline':headline, 'bodyText':description, 'link':link, 'imageUrl':imageUrl,
|
|
'weight':adWeight}); var puffArray = eval('puffs_' + '8254875'); var guid =
|
|
"676248"; var headline = "Sales and Marketing Director SMD/159/49"; var
|
|
description = "South East £125000"; var link =
|
|
"http://jobs.telegraph.co.uk/job/676248/permanent/south-east/sales-and-
|
|
marketing-director-smd-159-49-job-
|
|
vacancy.aspx?FromRSSFeed=-1012&WT.ac=676248"; var imageUrl =
|
|
"http://jobs.telegraph.co.uk/logos/64/6E/643CA70F-
|
|
BCF4-4C58-9A37-46A42236F76E_140_87-v2.jpg"; var adWeight = "1";
|
|
puffArray.push({'id':guid, 'headline':headline, 'bodyText':description,
|
|
'link':link, 'imageUrl':imageUrl, 'weight':adWeight}); var puffArray =
|
|
eval('puffs_' + '8254875'); var guid = "676273"; var headline = "Head of
|
|
e-Commerce HC/324/36"; var description = "UK £120000"; var link =
|
|
"http://jobs.telegraph.co.uk/job/676273/permanent/uk/head-of-e-commerce-
|
|
hc-324-36-job-vacancy.aspx?FromRSSFeed=-1012&WT.ac=676273"; var imageUrl =
|
|
"http://jobs.telegraph.co.uk/logos/64/6E/643CA70F-
|
|
BCF4-4C58-9A37-46A42236F76E_140_87-v2.jpg"; var adWeight = "1";
|
|
puffArray.push({'id':guid, 'headline':headline, 'bodyText':description,
|
|
'link':link, 'imageUrl':imageUrl, 'weight':adWeight});
|
|
|