Paddock to Pantry is planning to become the country’s third-largest grocery retailer as it embarks on a $25 million expansion program, which is set to bring 20 new locations and around 1000 jobs.

The online-first retailer is coming off the back of a 197 per cent increase in sales over the past year. Once the expansion programme is complete, it expects online sales to fall from 90 per cent of its business to around 33 per cent.

The rollout will target communities that are “underserved” by existing supermarkets, Paddock to Pantry said. It will take place over five years.

“The groundwork has already been done through the changes to supermarket competition settings. Those reforms have opened the door for independent operators like us to compete, and we’ve demonstrated that the model works,” said John Kennerley, Paddock to Pantry business manager.

“We’ve already done much of the heavy lifting. We have the distribution infrastructure in place, direct relationships with the major grocery manufacturers and a pricing model that allows us to compete.”

Kennerley went on to call for a government ‘supermarket growth fund’ to help the country’s grocery competitors improve their rates of expansion.

“Scaling from here is largely a matter of securing the capital to fit out stores, stock shelves and employ local people,” he added.

“That’s why access to low-interest funding could make such an immediate difference. We’re not asking the government to fund the creation of a new supermarket business. We’re talking about helping established operators replicate a model that’s already working.”

Paddock to Pantry is also planning a new 5000sqm distribution centre, which it says will facilitate the store expansion.