Online grocer Ocado on Tuesday confirmed plans to double its capacity by opening a second distribution centre in Warwickshire, that would see the creation of up to 2000 jobs.

The facility, that will cost £210m to build and be operational by the end of 2012, will be initially prepared to handle 120,000 orders a week.

But if demand increases, the company said it will be able to handle up to 180,000 orders - or £1bn in sales.

Ocado currently delivers Waitrose groceries for orders placed at its base in Hatfield. The second centre would enable it to deliver to 85 per cent of UK postcodes, as compared to 65 per cent at present, the Guardian reports.

The company, which has not turned a profit in ten years, saw its shares fall 28 per cent below their offer price when they were floated in July this year.

But last month it reported an almost 30 per cent rise in sales to £372.2m in the first 36 weeks of the year and it is confident that the rate of growth will continue, the Guardian adds.