Morrisons planning imminent online launch

Supermarket chain Morrisons - the only one of the "big four" without an online ordering and delivery service - is preparing to launch its new online service.

According to reports, it has established its own in-house digital marketing agency, M Digital, as a prelude to a full online launch.

A Morrisons spokesman told Marketing Week that the decision to create the agency "made sense" because it "ensures continuity of ongoing digital projects". According to Marketing Week, the in-house agency was set up in December, with IT services group Capgemini believed to be putting together the back-end system for Morrisons' ecommerce website.

The supermarket chain suffered a decline in like-for-like sales in the run-up to Christmas of 2.5 per cent, which some analysts attributed to its lack of an online offering. In response, chief executive Dalton Philips has promised to reveal details of an online offering in its full-year results presentation in March.

Morrisons has frequently been touted as a potential acquirer of perennially loss-making web-online supermarket Ocado, which is facing increasing competition from its main supplier, Waitrose, as it seeks to build a presence of its own.

However, Ocado's model of building and delivering from mega-warehouses is proving difficult to run profitably, with the warehouses - and the cost of delivering from them - an unnecessary expense for existing supermarket chains.

Morrisons' launch will coincide with the piloting of an online return for resurgent Iceland. The primarily frozen foods supermarket retailer, which targets small but cost-effective city centre locations, was an early pioneer of online retailing in the 1990s.

Following a disastrous merger with cash-and-carry operator Booker, however, the web shop was closed in 2006 as it was only marginally profitable, according to returning co-founder and CEO Malcolm Walker.

The move will come almost two years after Morrisons acquired the online childcare retailer Kiddicare in a £70m deal, which analysts at the time suggested was partly to provide a technology platform for a full online rollout.