Ocado’s sales rose over Christmas as the online grocer created more capacity to deliver orders and enticed new customers.

Ocado today posted a 20.1% rise in fourth-quarter gross retail sales to £271m in the 16 weeks to December 1.

Gross retail sales for the six weeks to January 5 rose 21.3% to £111.1m due to strong trading in the seven days up to Christmas.

Ocado’s average orders a week rose 19.1% year-on-year while its average order size rose 0.8% to £111.60.

Ocado chief executive Tim Steiner said: “We are pleased with the progress in our underlying trading reflecting the further improvements to our proposition to customers and consumers’ increasing desire to shop online for their groceries.

“While we are encouraged by this current trading, the retail environment remains both challenging and competitive, with consumer sentiment subdued, and we expect to continue growing broadly in line with, or slightly ahead of, the market.”

Ocado last week helped launch Morrisons’ online grocery service, which it is providing IT, picking and delivery services for.

Steiner added: “We are pleased to have enabled the launch of Morrisons.com, on schedule and as planned. This has been possible due to the strength of our best-in-class technology platform, the efforts of the teams involved at Ocado, and the continuing strong collaboration with Morrisons.”