Australian retailer Coles Myer has announced that it has bought online grocery retailer Shopfast for an undisclosed sum in a bid to improve its Internet sales business.

Coles Myer said the purchase, which includes Shopfast’s customer database, operating software, delivery vehicles and material handling equipment, would make it Australia’s largest online food retailer.

Coles Myer’s main rival Woolworths, which owns HomeShop and GreenGrocer, is a major competitor in the online grocery business.

Coles Online has been operating since July 1999 and delivers more than one million items a month, servicing most areas in Sydney and Melbourne.

Shopfast has been operating in Sydney since October 1998 and sources products from Campbells Cash & Carry.