Grocer sizes up non-food and online opportunities after Kiddicare acquisition
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Morrisons’ will make its first foray overseas next month through newly acquired online business Kiddicare.
Kiddicare, which Morrisons bought for £70m on Tuesday, will initially launch in one European country in March as a pilot ahead of a debut in all 27 EU countries.
Kiddicare chief executive Scott Weavers-Wright told Retail Week that the detail is still to be finalised but said: “We will test in one country and ensure the technology is perfect so the offer is scalable, then we can go out wide.”
He said there is “huge opportunity” for Kiddicare in Europe and acknowledged: “It’s clear with Morrisons’ 12 million weekly customers there’s more to go after in the UK.”
The European launch will allow Morrisons to gain an international foothold and gather data. Morrisons chief executive Dalton Philips said there is “lots of opportunity in the UK and Europe” for Kiddicare.
As well as providing an international bridgehead, the acquisition of Kiddicare gives Morrisons wider non-food and online opportunities - fields in which its competitors are much further advanced.
Kiddicare will remain a separate business and its team, led by Weavers-Wright and his wife Elaine who oversees buying, will lead Morrisons’ online business and launch the first new products in 2012.
Lines may include clothing, homewares and cookware. Morrisons finance director Richard Pennycook, who led the acquisition, will become the etailer’s chairman.
Philips said the deal is an “enabler” and as well as an “award-winning multichannel retailer” it gives Morrisons “an online platform that is at the forefront of technology”.
Fast-growing Kiddicare generated sales in its last financial year of £37.5m and EBITDA of £3m. It also has one store in Peterborough and a 160,000 sq ft freehold distribution centre. The shop incorporates kiosks from which customers can order from the full range.
Morrisons will consider installing kiosks in its stores offering a click-and-collect service, and selling Kiddicare products in some of its larger stores. Pennycook said Kiddicare’s warehouse has capacity for the business to quadruple in size and it has bought the land next door.
The acquisition does not give Morrisons a platform to sell food online. Philips said: “Food and non-food are quite distinct. Online is a channel that we don’t understand very well and this is an opportunity to understand it better.”