U.K.'s Morrisons buys about 10% stake in U.S. online grocer FreshDirect for US$50M; FreshDirect to get minority economic interest in Morrisons' planned London online operation
March 10, 2011
– Wm Morrison Supermarkets plc ("Morrisons") today announces that it has acquired a circa 10% stake in FreshDirect, the leading profitable online grocer in the U.S. serving customers in New York, New Jersey and Connecticut, for £32 million (US$50 million). FreshDirect will receive a minority economic interest in Morrisons planned London online operation.
The investment will play a key role in the development of Morrisons online food business in the UK.
Launched in 2002, FreshDirect is a fast growing online food retailer and, like Morrisons, has a strong focus on quality fresh foods, outstanding customer service and competitive pricing.
FreshDirect currently serves over 600,000 customers in New York and parts of New Jersey, Connecticut, Westchester County and Nassau County, and is known for its fresh-from-the-farm foods and brand-name groceries at everyday low prices, all delivered to the customer’s door.
FreshDirect’s customers can tailor their requirements for deli, butchery, fish and bakery product and over 600 Entrees and Side Dishes, made fresh daily by professional chefs using the finest, freshest ingredients.
Under the terms of the agreement, Morrisons CEO Dalton Philips will join the board of FreshDirect and Morrisons will embed a team in FreshDirect’s Long Island City, NY facility to learn about its profitable e-commerce model.
The two companies also have complementary businesses that emphasise fresh food, provenance and high levels of service. FreshDirect’s expertise delivers a customer friendly, online experience backed by strong IT infrastructure. Learning from FreshDirect will help Morrisons as it launches its e-commerce offering in the UK.
Dalton Philips, Chief Executive of Morrisons, said:
“I have seen retailers all over the world. Few have inspired me as much as the team at FreshDirect, a highly successful and profitable food retailer with a track record of terrific customer service.
“What we learn from FreshDirect will be invaluable as we plan our own profitable e-commerce business for the UK.”
Jason Ackerman, FreshDirect Founder and Chief Financial Officer, said:
“We are excited for our new relationship with Morrisons. It’s wonderful to have a retail partner who shares our deep passion for great customer service and quality fresh food.
“This investment is a strong endorsement of our unique business model from a major player in the supermarket industry. This new partnership and capital strengthens our ability to support our strong growth and continued expansion.”
The Morrisons investment will be used by FreshDirect to fund its continued growth and expansion in the online grocery market, as well as to further capitalise the business to support its resources for existing customers.