By James Davey
LONDON (Reuters) - Amazon (NASDAQ:AMZN) has stepped up its move into Britain's grocery market, expanding its relationship with Morrisons so Prime members have access to the supermarket group's full range on the internet giant's main website.
Amazon and Morrisons have had a tie-up since 2016 and have been steadily expanding their links, leading to speculation that the U.S. group could even emerge as a possible bidder for Britain's No. 4 supermarket chain. Both sides habitually decline comment on such market talk.
The coronavirus pandemic has seen a marked rise in demand for online groceries. Market researcher Nielsen said on Tuesday online grocery participation had grown to 14% of the UK grocery market in the 12 weeks to Aug. 8, double its pre-crisis rate.
Amazon and Morrisons said on Wednesday that Prime members would as part of their subscription be able to receive same-day delivery on orders of more than 40 pounds ($53) for no extra cost directly on the Amazon.co.uk website.
For orders worth less than 40 pounds there will be a 3.99 pound delivery charge.
They said "Morrisons on Amazon" launched in Leeds, northern England, and will be expanded to millions of Prime members across the United Kingdom in the coming weeks.
It will offer thousands of grocery products including meat, seafood, dairy and baked goods, fruit and vegetables. Prices will be the same as at Morrisons' stores.
Orders will be picked from local Morrisons stores by Morrisons staff and delivered to customers by Amazon partners.
Prime is Amazon's core retail proposition, costing an annual membership fee of 79 pounds. Membership provides access to unlimited one-day delivery as well as services such as TV, movies and music.
The Morrisons deal builds on Amazon's move last month to begin free delivery of its own grocery service to Prime members.
Morrisons, which has a 10.2% market share, trails market leader Tesco (OTC:TSCDY), Sainsbury's and Walmart (NYSE:WMT)'s Asda in annual sales.
Earlier this week Tesco CEO Dave Lewis told The Sunday Telegraph it planned to add free delivery to its Clubcard Plus loyalty scheme.
($1 = 0.7553 pounds)