Ocado has confirmed plans to open a second distribution centre, signing a deal for a 350,000 sq ft warehouse in the Midlands.

The second Customer Fulfilment Centre (CFC) will be at Birch Coppice Business Park at Dordon in North Warwickshire. The company said the new warehouse - which is costing £210m to develop - would double the potential capacity of the business.

The new centre is due to open at the end of 2012 and will be able to handle 120,000 orders a week when it opens, rising to 180,000 eventually. It is expected to create over 2,000 jobs.

The deal will enable Ocado to expand its geographical reach beyond the south-east, where it has its existing CFC at Hatfield. “This location ensures we will have capacity to provide more customers with the leading online grocery offering,” said chief executive Tim Steiner.

Having floated at 180p in July, Ocado’s shares opened this morning at 127.5p.