Morrisons in £70m deal to join web war

WM MORRISON yesterday announced that it had finally taken the plunge into online retail, splashing out £70m on baby goods firm Kiddicare.

The supermarket giant has so far resisted the move to the web while rivals like Sainsbury’s, Tesco and Asda see online sales as vital to their financial health.

But the purchase of Kiddicare will give Morrisons a foothold in the non-food retail market. The UK’s fourth largest supermarket chain has identified that as an area ripe for growth.

The retailer had been tipped to approach online delivery firm Ocado over a possible tie-up, but that prospect has been dismissed for the time being.

Scott and Elaine Weavers-Wright run the family-owned Kiddicare business, which had a turnover in 2010 of £37.5m and has grown by 75 per cent in the past three years.

It owns a store in Peterborough, where it has 160,000 sq ft of warehouse, retail and office space.

Morrisons chief executive Dalton Philips said: “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.”

Morrisons plans to launch new products from the company’s online platform from next year, while Kiddicare will continue operating as Kiddicare.com.

RBS analyst Justin Scarborough said: “This transaction, while small in size, should highlight the pace of change within the group. The opportunity to leverage the Kiddicare range across Morrisons’ 12m weekly shoppers is clear, in our view, as is the future opportunity for the group to widen its online non-food offer.”