Asda is to create 2,500 jobs this year as it shifts investment to its growing multichannel business, with stores supporting its internet and smartphone channels.
The company said it would spend £700m on new and existing stores and its supply chain, with its website also benefiting from the investment.
The news was announced as the retailer confirmed a 4.5% lift in total sales, including petrol, to £22.8bn in 2012.
Andy Clarke, president and CEO of Asda, said: "I'm proud that in the continuing and very challenging trading environment we were able to increase total sales by 4.5% last year. This shows that we are continuing to get it right for customers.
"By focusing on their needs through accelerating our investment in the technology and infrastructure to make shopping more convenient, customers can shop for what they want, when they want it."
Asda, which claims to be Britain's second biggest online grocer, said previous investment in its web-based operations had paid off with double-digit growth and was the primary reason for its new capital spend.
The retailer increased its home shopping capacity with the opening of a third purpose-built 'picking centre' in Nottingham last month, creating more than 600 new jobs.
As part of its wider plans, its 'Click and Collect' business, where customers can order online and collect from a store, will soon include same day delivery on food.
The retailer is planning to open 10 more new stores, including four new small format supermarkets, five superstores and one new non-food outlet.
The latest grocery share figures from Kantar Worldpanel, for the 12 weeks ending 14 April, show how intense competition has become with Waitrose, Aldi and Lidl all recording record market shares.
Within the big four, Sainsbury's was found to have delivered the strongest growth with 5.4% and was the only one to increase market share, now at 16.9%.
Tesco's market share currently stands at 29.9%, Asda's at 17.5% and Morrisons' at 11.5%.
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