Morrison Supermarkets announced Thursday it was launching a shopping website as the company reported its first annual profit decline in six years.
The company said it is in talks with Ocado Group to launch a online food store in 2014 in an effort to improve performance as shoppers move online.
The supermarket chain is also working to open more convenience stores.
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Data shows online grocery sales in the UK will double to £11.1bn and the convenience-store market will expand by 29% by 2017, according to the Institute for Grocery Distribution.
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Morrisons Chief Executive, Dalton Philip, admitted the British grocer struggled to grow last year in a difficult consumer market.
Pre-tax profits came in at £879m for the year ended February 3rd, a 7.1% drop from £879m in the prior year, and worse than most analysts' forecasts.
Like-for-like sales were down 2.1%, compared to a jump of 1.8% a year earlier.
"The sustained pressure on consumer spending was reflected in our like-for-like sales performance, which was not as good as it should have been," Phillips said, adding that disposable incomes were hit by inflation on commodities.
"We have implemented a range of measures to address this and are making good progress in improving our promotional effectiveness and in communicating our points of difference."
During the period, Morrisons opened 17 new supermarkets and launched 5,000 of its own brand products. The group plans to invest further in more stores and anticipates capital expenditure in 2013/14 to be £1.1bn.
While Morrisons posted a fall in profits, total turnover increased slightly by 2.5% to £18.1bn compared to £17.6bn the previous year.
Underlying earnings per share grew 7.0% to 27.3p and the company raised its total dividend by 10% to 11.8p.
"Although this has been a difficult year in trading terms for Morrisons as we struggled to grow sales in a tough consumer environment, we have delivered a 7.0% improvement in underlying earnings per share and announced a 10% dividend increase, in line with our previously stated policy," Chairman Ian Gibson said.
"It has also been a period of significant strategic progress as we continue to lay the foundations for future growth."
Looking ahead, Morrisons will focus on its new website and on implementing changes to address the challenging consumer and market environment which is expected to persist through the coming year.
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