Morrisons has sold its stake in US grocery delivery serviceFresh Direct for £45m in a move to boost its revenues amid a sales decline.
The British supermarket chain acquired a 10 per cent stake in the grocery delivery service for £31m in 2011, making a £14m premium on its initial investment.
The revenue will be a welcome boost for the supermarket, whose sales have declined with the rise of German discounters Aldi and Lidl. Kantar Worldpanel’s latest grocery share figures, for the 12 weeks to 17 July 2016, showed a 1.8 per cent drop in revenues.
Bruno Monteyne, a retail analyst at Bernstein Research, told the Guardian the move makes sense for Morrisons. “It has to be positive,” he said. “Morrisons will be able to focus on its core business and is getting a very good price for this stake.”
At the time of its investment in Fresh Direct, which is based in Long Island, New York, Morrisons was criticised for entering the online retail market too late. But former chief executive Dalton Philips went on to sign a 25-year contract with British online grocer Ocado in 2013.
A subsequent deal to supply groceries to Amazon Prime Now and Amazon Pantry customers, and the extension of Morrisons’ deal with Ocado to reach more households, have cemented the retailer’s position in the online grocery market.
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