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Ocado insists it has continued to gain share in the online grocery market in the UK, despite some concerns about how the launch of a new fresh food delivery service by internet giant Amazon might affect its business.

The online grocer, which is popular with Britain’s middle classes, has reported a slight improvement in half-year pre-tax profits to £8.5m, from £7.2m during the same period a year earlier on revenue of £584.2m, up more than 15 per cent year-on-year.

Tim Steiner, Ocado’s chief executive, described the group’s performance during the 24 weeks to May 15 as “steady” but highlighted the competitive nature of the market, as the “big four” retailers cut prices to guard their market shares against the continued rise of the discounter grocers, Aldi and Lidl.

Ocado’s shares hit a three-year low earlier this month after Amazon launched its fresh food delivery service in the UK.

Mr Steiner said:

The market remains competitive with ongoing price deflation but our increasing scale and operational efficiencies meant that we still grew profits, albeit at a slower rate.

We have been gaining share in the online grocery market and expect this to continue. The last few years have shown beyond doubt that British shoppers are choosing the benefits of grocery shopping online and we believe that the momentum of channel shift away from bricks and mortar stores will continue. The more opportunities customers have to try grocery shopping online, the more they will be attracted to Ocado’s superior customer offer.

Copyright The Financial Times Limited 2017. All rights reserved.

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