Sainsbury's to create 900 jobs at first 'dark store'

LONDON, July 21 (Reuters) - Sainsbury (Amsterdam: SJ6.AS - news) 's, Britain's second-biggest supermarket group, plans to create 900 jobs by 2020 in London at its first distribution centre dedicated to online grocery orders, it said on Thursday.

The 185,000 square feet "dark store" at Bromley-by-Bow, east London, will open in the autumn and cater for growing demand for online groceries.

Sainsbury's traditional strategy for online grocery has been to pick orders from its supermarket store network across the UK.

The firm said this model would continue, but the Bromley-by-Bow dark store, so named because it is not open to the public, will help it keep pace with demand in London, enabling it to fulfil another 25,000 orders per week.

Online shopping is one of the better-performing parts of Britain's retail sector and has become a key battleground for the big supermarkets as they grapple with the growth of German discounters Aldi and Lidl.

Britain's online food market is expected to nearly double to 17.2 billion pounds ($22.7 billion) in the five years to 2020, according to industry research group IGD.

Online grocery competition is particularly fierce in London.

Sainsbury's said it had begun recruitment for the first 470 jobs and planned to recruit another 430 by 2020.

The group, which trails market leader Tesco (Xetra: 852647 - news) in annual sales, is also trialling same day online grocery deliveries at three stores in London and southeast England.

If the trials are successful, same-day online grocery delivery will be available in 30 stores by Christmas, it said.

In May, Sainsbury's announced plans to double the number of its Click & Collect sites over the next 12 months in response to the increasing popularity of the service.

($1 = 0.7586 pounds) (Reporting by James Davey; Editing by Mark Potter)