Ocado shares rose at the start of the week when the home shopping group, which sells Waitrose groceries as well as other brands, said it could cater for 1.5 million more potential customers by expanding delivery to the Southwest of England and South Wales.

Ocado is building a distribution centre in Bristol to facilitate the expansion. Construction of the 40,000 sq ft shed will begin “shortly”, and the site should open in March 2011. Earlier this month Ocado said it would also open a fulfilment centre in the Midlands.

Shore Capital, advising sell, remained concerned about Ocado and said: “Frankly, Ocado expanding into Warwickshire and Somerset just leads us to be concerned that its core market in the Southeast of England is not substantial enough to support the order or revenue potential of its Hatfield customer-fulfilment centre.”