It began purely as a grocery delivery business, bringing Waitrose's selection of everything from baked beans to runner beans to your door. Now Ocado is moving into toys as it makes a play for a bigger part of the online retail market.

Customers will be able to order Transformers, products by Playmobil, Hasbro and Mattel, CBeebies cuddly toys, Bob the Builder and “classics” such as Crayola crayons, Cluedo and Corgi cars - alongside more than 15,000 Waitrose and branded food-and-drink products as Ocado, after eight years in which it has yet to make a full-year profit, diversifies.

Jason Gissing, the marketing and finance director, said yesterday: “We surveyed 50,000 customers earlier this year. They told us they love the service but that we were too expensive and didn't sell a broad enough range. So we cut our prices to match Tesco and we have increased our range from 9,500 products to 15,000. We sell more nappies than Waitrose does nationwide, even though they are ten times our size. We have more than a million customers and, as many of them have children, we have decided to start selling toys.”

Ocado has raised nearly £300 million since its inception in 2000, when Mr Gissing and two colleagues left Goldman Sachs to set up the business. Despite claiming to have 50 per cent market share in London, the company has yet to break into the black.

Accounts filed last month revealed that the business ran up annual losses of nearly £40 million in the year to December 2, 2007.

Mr Gissing reiterated yesterday that Ocado expected to make a profit of £1 million to £2 million in the current financial year before exceptional charges.

He added that there were no plans to sell the business, after rumours this month that the founders were seeking an exit.

“All businesses are always for sale at a price, but we are not currently trying to sell ours,” he said. “We think we are on to a good thing.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive