Ocado's expansion plans should elevate it from the bottom to the top of the league in terms of grocery retailer profit margins, ­believes supply chain consultancy Sequoia.

The online grocer's operating margin would leap from -0.4% (2010) to 7.2%, taking it past Tesco, which currently boasted the biggest margin of the supermarket chains at 6.3% (2010), said Sequoia.

The margin turnaround is expected to come from a £6 drop in supply chain costs per order to £21 as savings from its expansion plans kick in, it added, ­likening Ocado to Amazon in its evolution.

"Ocado is a slow-motion equivalent of Amazon, which endured seven years of losses before making a profit," said technical director David Bosomworth.

Ocado's Hatfield warehouse and the construction of a second giant distribution centre in Warwickshire would be key to cutting supply chain costs.

Sequoia's supply chain modelling suggested half the £6 per order saving would come from economies of scale at the distribution centres.

Lower delivery and distribution costs created by the shorter journeys resulting from higher delivery numbers and a bigger warehouse network would deliver the rest of the saving.

However, to achieve the saving and margin improvements, Ocado would have to run its distribution centres at full future capacity, increasing the number of orders a week from 92,916 in 2010 to 360,000.

Sequoia said it had based its prediction on Ocado ­being able to grow volumes without experiencing a ­decline in gross margins.