The grocer will invest approximately£30 million over two years in the venture, which will launch in the first half of the 2009/2010 financial year.
As it posted full-year results, Sainsbury’s said its existing online food business has had “an outstanding year”, notching up sales growth of 43 per cent and that retailing non-food online was a natural extension of its growing in-store range.
The service will sell branded as well as Sainsbury’s own-label products and will have its own dedicated IT and supply chain.
King unveiled a 28.4 per cent increase in underlying pre-tax profits to£488 million for the year to March 22. Sales rose 5.8 per cent to£19.29 billion. Like-for-likes advanced 3.9 per cent.
King said the store group has exceeded the targets set in 2004 as part of the Making Sainsbury’s Great Again turnaround programme and was bullish on prospects.
He said: “Sainsbury’s is now a much better business able to compete and grow in this challenging environment. We will continue to focus on developing our offer in line with changing customer requirements and on driving further operational savings. This will ensure we continue to make progress in the year ahead.”