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Online retail giant Amazon has joined forces with supermarket chain Morrisons.  The company has secured a supply contract with the grocer, which will see it offering a number of Morrisons products through its food delivery service Amazon Pantry and its subscriber service Amazon Prime Now. Food

Amazon Pantry was launched in the UK last year, escalating competition with the big four supermarkets, but did not offer fresh food.

Under the new deal, Morrisons will supply fresh, frozen and non-perishable goods to Amazon customers.

Under the wholesale supply agreement unveiled on Monday, Morrisons said a number of its products will be available to Amazon Pantry and Amazon Prime customers, who pay an annual subscription fee.

In addition to the announcement Morrisons has agreed with Ocado to expand Morrisons.com and an “agreement in principle” has been met.

 

The supermarket chain Morrisons was the first the cut diesel prices to below £1 a litre on Sunday and the other three big supermarkets also dropped prices on Monday.

Petrol, which is usually cheaper than diesel, was reduced below £1 a litre in the weeks before Christmas and these cuts show the further falls in the price of oil. Asda currently has 277 filling stations and said that it was the first supermarket to cut the price of petrol to below £1 a litre in November. Morrisons also stated this.

The price of oil is at its lowest for 11 years and Morrisons’ cuts were its cheapest since 2009. UK Brent crude oil is trading at just below $38, which is £26 per barrel. This means it lost 35% over the year.

About 75% of the price of UK fuel goes to the Treasury in duty and VAT and the remainder goes on refinery costs, distribution and the fuel retailers’ profit margins.

According to the motorists’ organisation, the forecourt price should have been cut earlier seeing as the wholesale price of diesel has been 2p lower than the wholesale price of petrol. This started a couple of weeks before Christmas and the organisation stated that more miles were driven in the UK on diesel than petrol.

Sainsbury’s is charging slightly more at 99.9p per litre whereas Morrisons, Asda and Tesco are charging 99.7p.

Morrisons is at risk of falling out of the FTSE 100 due to a severe drop in its share price and concerning recovery plans.

The supermarket chain has been in the list for more than 14 years but as sales have fallen its share price has reduced by 17% this year.

In the last quarterly reshuffles in June and September, Morrisons missed demotion and the final decision will be made by the London Stock Exchange. This will be decided on Wednesday based upon the closing price of the day before.

The new chief executive David Potts has been attempting to make sure the company’s fortune is not all lost but the supermarket has been under pressure through a tough trading period.

Morrisons announced a 2.6% drop in sales last month for the three months to November, which meant that there was a further fall in share price.

The supermarket also faced its worst result in eight years back in March when there was a 52% drop in annual profits to £345 million.

It is no surprise that Morrisons is struggling considering the current state of the sector due to price wars with the big four supermarkets because of the rise of the discounters.

Morrisons has had to make several losses and this included selling 140 “M” local convenience stores that did not make any profit as a result of needing to focus on the larger stores.

 

 

Morrisons reported that third-quarter sales were affected by 2.4% because of the cut backs on promotional vouchers.

Like-for-like sales, which excludes fuel, fell by 2.6% in the 13 weeks to 1 November but like-for-like sales online rose by 1% in the third quarter.

Morrisons is the fourth largest supermarket, with Tesco, Sainsbury’s and Asda in front of them but discounted supermarkets such as Aldi and Lidl are creeping up behind them.

As there has been so much competition between the big supermarkets more recently, price wars have been initiated to try to make sure customers do not start shopping elsewhere instead.

The supermarket did report a 52% drop in annual profits to £345 million in March, which was its worst result in eight years so any drop in sales at Morrisons is bad news.

Morrisons is trying to turn it around and in September reported that it would sell 140 “M” local convenience stores in a £25 million deal. This was because many of the convenience stores did not make enough profits and this resulted in the closure of 11 “M” stores.

Christmas is not that far away and on Friday the company will launch its Christmas marketing campaign, which includes using staff to promote their festivities opposed to celebrities Ant and Dec.

Nine hundred jobs are at risk because the supermarket chain Morrisons made the decision to close 11 stores in effort to transform the company’s fortunes.

David Potts, who started working as the chief executive in March, stated that it is with regret that stores may close. However, the chief executive also stated that the closures mainly involve the smaller-sized supermarkets. The locations of these have not been revealed due to staff still being informed.

As well as this news, the business reported a 47% drop in half yearly profits before tax of £126 million.

Morrisons will sell 140 loss-making “M” local convenience stores however, this will be rebranded as “My Local” and the staff will be kept on with some 200 jobs to be created.

The big four supermarkets are under a lot of pressure because of rival discount stores such as Aldi and Lidl gaining more customers.

The changes that Morrisons are making could either help in making sure that the remaining stores are improved and make more profit, or it could go in the opposite direction.

The future of supermarkets is still unknown as all companies are attempting to get the best deals in for their customers. The problem is that the discounters are on the rise and many customers go there for their weekly shop and only go to one of the big four supermarkets for particular products.

The UK’s fourth largest supermarket Morrisons is cutting its prices of 200 items by up to a third. The firm has said that many everyday products will be cut in price and this is an attempt to fight the battle between the big four supermarkets and discounter stores such as Aldi and Lidl.

Aldi and Lidl has become a main supermarket for many and Morrisons, Tesco, Sainsbury’s and Asda are paying the price for not only the rise of these discounted supermarkets, but also the rise of online shopping. Morrisons has been hit particularly hard and plans to cut the price of four pints of semi-skimmed milk by 11%, pricing it at 89p whilst also lowering the price of some bread brands by around 21%.

2014 was a bad year for Morrisons as its profits halved, which meant that this was their lowest level for eight years. Despite this, the supermarket said it would commit a billion pounds over the next three years to lowering prices, which should make consumers happy. This was a move that rival firm Asda also made, as it committed £300 million to lowering prices in the first three months of the year. Not only this, but Sainsbury’s continues to invest £150 million to reduce the cost of 1,000 products and Tesco is dropping prices on 2,500 products as well.

Compared with 2014, a typical basket of day-to-day items is now 2.1% cheaper and all the major retailers offer cheaper like-for-like goods, according to analyst Kantar Worldpanel.

Although the big four supermarkets are doing all that they can to stay in power and compete in an ever-growing market, Aldi and Lidl are gradually gaining more of the market share. Lidl has captured 3.9% of the market share, which is a new record high for the company and Aldi has increased its share to 5.4%, according to Kantar figures up to 24th May.

Hastings has welcomed a new Aldi store recently in Ore which is one of 60 that are part of the new expansion plans in the UK. As the rising supermarket celebrates its 25th anniversary in the UK, they are getting ready to take over the grocery market share and up their game against the established supermarket giants.

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The rise of discounter supermarkets such as Aldi and Lidl has changed the way consumers buy their food because every customer, no matter the demographic, is now looking not just for a cheaper alternative but a more transparent and simpler shopping experience.

The “big four” which includes Sainsbury’s, Tesco, ASDA and Morrisons have been showing a slump in sales and as a result have had to close stores to compensate for their damaged balance sheets.

Aldi’s plans are ambitious as they hope to open a further 1.02m sq ft of shop space by 2022, which equates to around 1000 stores.

The German discounter store has now become the sixth biggest supermarket in the UK after knocking the long-established business Waitrose, who is in partnership with John Lewis, off their post. Aldi now takes 5.3% of the market share whereas Waitrose has 5.1%.

The main four supermarkets are being squeezed from both ends, seeing their profits fall from high-end supermarkets such as Waitrose and Marks & Spencer attacking from the top and Aldi and Lidl from the bottom.

Aldi has gained growth as shoppers have tried out new stores to save money due to prices rising at other supermarkets.

As part of the fightback, the popular supermarket chains now offer price comparison to keep customers returning. Tesco call theirs the ‘Price Promise’ and compare against all three big supermarkets, Sainsbury’s one is ‘Brand Match’ where they only compare with ASDA who in turn call theirs the ‘Price Guarantee’ and they compare with Waitrose as well as the other three main stores. Morrisons use a ‘Match and More’ card which not only compares with the three big supermarkets, but also Aldi and Lidl.

Customers will receive coupons or money off their next shop if they could have saved money at another store.

This system only works with the top four supermarkets comparing against each other, excluding Morrisons, and this could be why customers choose the cheaper option, as they know they are guaranteed a cheaper shop.

Consumers now use Aldi and Lidl for their main weekly shop but still buy products from the larger supermarkets if the cheaper chains do not stock them.

ASDA is owned by the global discounted store Wal-Mart, who is the biggest company in the world by value, which means that the business is able to lower prices to attract customers away from Tesco and Sainsbury’s.

ASDA currently has 17.1% of the market share, still behind Tesco at 28.4% but with Tesco’s recent problems of falling profits and extra store closures, ASDA could sneak in up to top if the German discounters do not beat them to it.

Whichever way you look at it, the market is definitely changing and it’s doing so rapidly as more consumers vote with their wallets.

Also See: Regulator receives super complaint about supermarket promotions