Ocado distributes it’s products through just two warehouses with no retail stores.

The online supermarket said the UK grocery market continued to be a challenging marketplace throughout 2015 due to ongoing price competitiveness and deflationary pressures which caused a change in customer behaviour especially with many customers shifting towards discount stores and the online marketplace.

Notwithstanding the challenging market environment the business said it continued to deliver on its strategic objectives with it focusing on driving growth, maximising efficiency and utilising its knowledge to position itself as the demand for online grocery shopping increases.

Ocado said it grew its sales ahead of the broader UK online grocery market and ahead of the overall UK grocery market. Revenue rose by 16.7% from £948.9m to £1,107.6m whilst gross profits hit 375.1m from 312.9m, a 19.9% improvement. New customer acquisitions were up by over 20%, with active customers up 12.4% to 509,000 from 453,000 in 2014. Order volumes grew by 16.8% to an average of over 195,000 orders per week in comparison to 167,000 in 2014. Average basket value declined by 2.1% to £109.95m (2014: £112.25m) which was negatively impacted by price deflation in the market.

Tim Steiner, Chief Executive Officer of Ocado, said:

“We are pleased to announce results today which illustrate the progress Ocado has made through its clear focus on innovation and customer service. The continued enhancement of Ocado’s industry-leading technology and investment into our retail proposition over the course of the year has meant our customers now have greater choice, competitive prices and consistently high order accuracy and on-time delivery. As a result, customer numbers grew, reflected in strong revenue growth in a very challenging market environment.

“We will shortly open our next Customer Fulfilment Centre in Andover which houses the first installation of our new proprietary equipment solution. This has been designed and is manufactured in Britain by Ocado, and will significantly further enhance our capabilities and efficiencies.

“Our ability to package our unique proprietary technology, including our equipment solution, for retail partners outside the UK through our Ocado Smart Platform is proving to be of great interest to a significant number of retailers. We expect to sign multiple deals in multiple territories in the medium term.

“We are transforming the shopping experience for the benefit of our customers in the UK, and expect to do so for customers in other countries through Ocado Smart Platform. We look forward to making further progress over the current financial year.”

The agreement the company holds with Morrisons contributed £73.9 million of revenue in 2015 which improved from £45.1 million the prior year due to additional revenues from on-going expansions at Morrisons.com.

After speculation recently regarding a possible buyout from Amazon the company also noted that despite not signing a first deal in 2015, “discussions with multiple potential international partners to adopt the Ocado Smart Platform solution continue and our confidence in signing a deal remains high.”