Who will make the perfect match in Morrisons' bizarre love triangle?

Outlook

Morrisons deal with Amazon is an attempt to evolve the business (Getty)

Is Morrisons “Primed” to give up its position as odds-on favourite to be the first of the big four supermarkets to fall victim to the current price war?

The stock market’s reaction in the wake of the grocer signing a deal to supply Amazon with groceries suggests it might be.

At the same time, there is another agreement “in principle” to take space in its other online partner Ocado’s huge new Customer Fulfilment Centre in Erith next year, while the latter will deliver “a store pick solution” for Morrisons.

It seems the loveless marriage with Ocado that Morrisons previous management entered into is turning into a bizarre love triangle. Or is the Ocado deal simply a last throw of the dice before the two end up in the divorce court ahead of the traditional grocer consummating its relationship with its Amazonian internet bride?

Given the kicking meted out to Ocado shares, it seems the market is betting on the latter. It’s not hard to see why. There are a lot of caveats attached to the new Ocado arrangement, but Morrisons chief executive, David Potts, was positively gushing about the Amazon tie up. His company has long sought to make a virtue of the fact that it produces an unusual amount of its own product compared with other supermarkets. Shoppers have largely been unmoved, but it could now work in Morrisons favour.

The sector’s ultimate survivors will be those capable of thinking outside the shopping trolley and evolving their businesses in the face of a tough new environment. Morrisons deal with Amazon is an attempt to do that, just as Sainsbury’s tilt at Argos was, at least before the arrival of South Africa’s Steinhoff with a potential counter bid.

Morrisons has no such worries. The only question is how this deal will flow through to its bottom line. Amazon isn’t exactly known for generosity to its suppliers. So while investors may have been right to kick Ocado, it’s not at all clear whether they were right to mark up Morrisons shares quite so strongly.

Still, given the pessimism previously surrounding the business, perhaps Mr Potts and his crew deserve their moment in the sun now that Amazon’s smile is upon them.

Sometimes financial fairy tales do come true ...

Once upon a time there was a savings institution that got into a lot of trouble after an evil wizard cast a spell on commercial property that caused the roof to fall in.

With a cruel winter setting in on its savers and the wolves howling at the door, it had to run to the Government, cap in hand. The Government said it would help with gold, but there would be a price to pay. Every step the savings institution took would feel like walking on daggers afterwards because the Government wanted its money back. Even if it meant using the only thing the savings institution had left: a handful of magic beans, sorry, investment properties with rental income.

And that was just about the end of the matter, leaving taxpayers living unhappily ever after.

But then along came a fairy regulator who said “this should not be”. She cast a spell on six directors and, lo, they agreed to be banned from being directors for six years. Then she cast another spell, on the auditors and lo, they agreed to be fined. So while it didn’t exactly end happily, at least some justice was done.

While that might sound like a fairy tale, it is in reality a true story. The savings institution was a small one, the Northern Ireland based Presbyterian Mutual Society.

The fines that have just been announced were for £140,000 on its audit firm Moore Stephens, and for £20,000 on “audit engagement partner” David McLean. The directors accepted the bans some time ago.

Now that the regulators have proved that fairy tales can come true, doesn’t this rather whet your appetite for a full blown novel involving, say, HBOS? It’s time for the FRC to get typing. Writers block is no excuse.

Barclays could be dancing out of Africa

First Barclays was in Africa, then it was out. Will today see the end of the latest hokey cokey? After months of speculation, chief executive Jes Staley looks set to cast aside another part of his predecessor Bob Diamond’s strategy by pulling out of Africa.

The bank’s statement, in the wake of reports over the weekend, said the board continued to “evaluate its strategic options”. Which might better be read as: “For sale, one careful owner”.

The bank’s return to a continent it abandoned reluctantly only after intense pressure from anti-apartheid activists, made a lot of sense. Africa is deep within Barclays DNA. It had been good to Barclays – until recently, when the wheels started falling off South Africa and with the rest of the continent shaken by the commodity price crunch, that has shaken the faith of even its most optimistic advocates. Among them is Mr Diamond. There would be a certain irony in his Africa-focused banking group Atlas Mara emerging as a bidder for Barclays Africa. But that’s unlikely because Atlas has struggled with the continent’s latest set of problems.

Those problems make it a bad time to sell. But with a retail bank to ring-fence, an investment bank to sort out and a chairman breathing down his neck, Mr Staley needs to focus on battles he can win. If he emerges victorious, it might then be time to start the hokey cokey again.