Ocado shares jump as it confirms talks with Morrisons The announcement came as Ocado unveiled its latest trading update. The online retailer said that, in the 12 weeks to February 24, sales rose by 14.4pc compared to the same period in 2012, while the average number of orders a week rose by 12pc. Customers were also spending 2.2pc more on their orders from the online grocer. Ocado said the discussion with the UK's fourth largest supermarket to supply existing and future technology did not involve any talk of Morrisons acquiring any equity stake in the online retailer. Morrisons is the only one of the UK's leading supermarkets not to have an online business and Tesco has been selling food over the internet for a decade. It added that if an agreement was reached, it would run alongside Ocado's current deal with Waitrose. Ocado said discussions were ongoing, adding that there was no certainty that an agreement would be reached. However, John Ibbotson, director of retail consultants, Retail Vision, said Ocado remained "under the cosh." Despite the lift in sales, he said it "will not alter the fact that the millions invested in Ocado is unlikely to see a satisfactory return." Ocado has recently opened a new distribution centre in Dordon, Warwickshire which cost more than £200m to build and created 1,000 jobs. Duncan Tatton-Brown, chief financial officer at Ocado, said last month that earnings in 2013 would be reduced by a depreciation in the value of Ocado's new distribution warehouse, but added that it was vital to the company's future growth prospects. Forecasts in the City suggest that the depreciation for Ocado will increase from £29m to £40m this year as the value of that investment declines. It's crunch time for Ocado. Everything now depends on the performance of its newly opened 350,000 sq ft Dordon distribution centre," Mr Ibbotson said. Will it ever justify the £210m spent, especially given that rivals Tesco, ASDA and Sainsbury's have a much more efficient model? Even its Hatfield distribution centre is under-utilised. He added that Morrisons already had good distribution in place and could deliver from its own stores, "so why spend millions on added distribution centres?" Despite Ocado failing to make a pre-tax profit since it was founded in 2000, shares in the company have almost doubled since it secured breathing space from its banks with a £36m share placing last November. The retailer has also been boosted by Sir Stuart Rose, the former chief executive of M&S, agreeing to become chairman.