Struggling supermarket chain Morrisons has announced a tie-up with online retail giant Amazon, supplying groceries to Amazon Prime customers.

This will be Amazon’s first foray into the British fresh food market, after launching Amazon Pantry last year. Morrisons will now supply fresh products for both the Amazon Prime Now and Amazon Pantry brands.

This major agreement will be a big coup for Morrisons, who have recently been struggling to compete with discount brands Aldi and Lidl and have issued several profit warnings. As the British grocery market has evolved over the past few years, analysts have warned that this expansion of Amazon’s already huge service could well hurt the traditional players further.

In a statement, Morrisons Chief Executive David Potts said:

“The combination of our fresh food expertise with Amazon’s online and logistics capabilities is compelling.

“This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business. We look forward to working with Amazon to develop and grow this partnership over the coming months.”

Morrisons (LON:MRW) shares have shot up on the news this morning, currently trading up 4.31 percent at 196.00 (0843GMT).

29/02/2016