Morrisons joins forces with Deliveroo to handle order capacity amid Covid-19
The UK supermarket chain saw its shares close higher on Wednesday after announcing it is partnering with the food delivery service provider to help boost order capacity during the coronavirus pandemic.
Morrisons has partnered with Deliveroo amid the Covid-19 pandemic in a bid to improve its delivery capacity and cope with the rise in demand due to the government-imposed lockdown.
Customers can order from a selection of 70 essential items from 130 Morrisons supermarkets across the UK using the Deliveroo app.
‘Our partnership with Deliveroo will help us to continue to play our full part in feeding the nation,’ Morrisons CEO David Potts said. ‘Customers will be able to order essential products from Morrisons biked by Deliveroo to the door in as little as under 30 minutes.’
‘It’s a great combination of traditional and modern methods and it will provide more vulnerable people with the opportunity to receive their home delivery,’ he added.
Morrisons partnership with Deliveroo will last until the lockdown ends, the company said, but the UK government is unclear when that exact date will be.
‘With families and vulnerable people in isolation, it is more important than ever that we make sure they have access to the essential household items they need,’ Deliveroo vice president of new business, Ajay Lakhwani, said.
‘During this worrying period we want to play our role in making sure people have access to a range of items, in particular the vulnerable who cannot leave their homes,’ he added.
Morrisons shares rise after Deliveroo partnership
After announcing the partnership, shares in Morrison climbed higher on Wednesday, closing at 178p a share.
Shares in Morrison peaked at 199p a share in mid-March this year, with investors anticipating stronger sales due to panic buying as consumers are forced to stay home amid the viral outbreak.
However, those gains have largely been eroded as investors and analysts realise that panic buying is a double-edged sword. On Wednesday, Tesco admitted that despite experiencing a surge in sales, it could end up paying up to £925 million in higher recruitment and distribution costs in order to meet demand.
‘Growth is only really relevant if it is profitable and the 30% surge in sales in recent weeks may have been more of a headache than the boost it might superficially have appeared to be,’ Russ Mould, investment director at AJ Bell said in a note.
Morrisons is trading at 180p a share as of 12:45 (GMT) on Thursday.
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Reports suggested that Deliveroo planned to conduct its IPO in early 2020. However, the company will likely postpone the IPO until the coronavirus outbreak ends.
But when the company does give an official date, investors can trade the Deliveroo IPO in two ways with IG – before and after the listing.
Before the IPO
IG will be offering a ‘grey market’ before the IPO is held, enabling you to speculate on Deliveroo's share price before it goes public.
With a grey market, you can:
‘Buy’ if you think the market cap will go up from the grey market price
‘Sell’ if you think the market cap will go down from the grey market price
*The grey market price will be based on our prediction of the Deliveroo market capitalisation at the end of the first trading day.
After the IPO
Once Deliveroo has listed, there are still multiple ways you can attempt to profit on the company's IPO with IG.
As with all stock markets, you will now be able to:
Go long or short on Deliveroo by CFD trading
Buy and own Deliveroo shares via share trading
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