John Lewis Partnership has reported positive results for 2007 but its online grocery business failed to meet expectations.

Web shopping channel Ocado posted trading losses of £7.1m, with nearly £1m brought forward from last year. By comparison, the overall retail group posted an 18.7 per cent increase in profit to £379.8m, with a sales rise of 6.3 per cent to £6.8bn.

Ocado's market share is approaching 20 per cent. The market leaders in the sector include Tesco Direct and Sainsbury's, which reported its best ever online performance this year, despite the general high street gloom.

John Lewis was a majority shareholder in Ocado but has diluted is stake to 24.1 per cent and has not provided any further capital in recent fundraising rounds.

Following the expiry of an initial supply contract signed in 2000, the relationship between the company and Waitrose, one of the John Lewis-owned companies, is based on a one-year rolling contract.

Despite a challenging environment for high street retailers, the group is confident that it will perform well in the year ahead, said chairman Charlie Mayfield.

"The diversity of our business and our partnership model makes us resilient and able to perform well even in the most testing market conditions," he said.

"We are committed to the growth plans for our business and I am confident that we can deliver our long term plans."