Morrisons to expand home delivery service after new Ocado deal

Supermarket chain Morrisons is to expand its home delivery service nationwide after striking a new deal with its online partner, Ocado.

Morrisons' online business is available to about half of UK households, but currently does not deliver to areas such as the South West or Scotland.

The new deal allows Morrisons to use its own stores to pick products for delivery, doubling its reach.

Morrisons will also increase the number of non-food brands it sells online.

'More customers'

Morrisons and Ocado joined forces in 2013, finally enabling Morrisons to launch an online business years after its main rivals had already done so.

Morrisons chief executive David Potts said the latest changes would allow the retailer to reach millions more customers.

"The new investments in online growth are further examples of Morrisons building a broader business and will allow millions more customers all over Britain to enjoy Morrisons' good-quality fresh food and great value for money," he added.

Ocado's distribution centre in Hatfield

Despite the new deal and extra investment, the company said it expected its online business to remain a loss-making concern in the short-term.

But it thinks its online operation, together with its wholesale distribution business and food manufacturing division, will boost profits by up to £100m in future.

Morrisons announced in February that it had struck a new supply agreement with Amazon, making hundreds of its products available on Amazon's website.

Under the terms of the new deal, Ocado will have fewer restrictions preventing it from working with other retailers, although the company has still agreed not to tie-up with major players Tesco, Asda , Sainsbury's and discounters Aldi and Lidl.