WM MORRISON yesterday announced a £32m deal to purchase a ten per cent stake in New York-based online grocer FreshDirect, as it prepares the ground to take on rivals on the web.
Under the terms of the deal, Morrisons chief executive Dalton Philips will take a seat on the board, and top Morrisons executives will travel to the US to study their approach and technical know-how so that the chain can launch online within the next two years.
FreshDirect, which delivers groceries directly to households in New York, has a similar business model to Ocado – with which Morrisons was rumoured to have mulled trying to mount a cash bid for, before yesterday’s stake purchase.
This purchase follows its acquisition of internet retailer Kiddicare for £70m last month. The company also reported a pre-tax profit of £874m for the 12 months to the end of January, up from the £858m it made in the same period a year ago. Like-for-like sales, excluding fuel and VAT, were up 0.9 per cent. The supermarket hiked its total dividend for the year by 17 per cent to 9.6p. It also confirmed a £1bn share buyback plan over the next two years.
In addition the grocer said it would open three convenience stores, called M Local, in the north of England in July.