Sainsbury's website meltdown could lose it thousands of online customers in the next few months, The Grocer has learnt.

The retailer claimed that a computer fault crashed its home delivery website, which has been suspended since Tuesday afternoon and is thought to be losing the company £1m and more than 10,000 shoppers a day.

Sainsbury's offered £10 to every shopper who lost an order but as The Grocer went to press an industry insider said the problem was not expected to be resolved until late Friday.

"If the service does not resume by Friday - the busiest day for online orders - then Sainsbury's is in real trouble," said the source. "The lost orders will have huge repercussions on the thousands of wasted working hours of in-store pickers and delivery drivers and I expect to see consumers look elsewhere for their online shopping over the next few months."

Sainsbury's apologised to customers and said it was rushing to fix the problem. It denied reports that personal details had been lost.

Meanwhile, rival online retailers acted quickly to take advantage. Tim Steiner, chief executive of Ocado, immediately saw an increase in orders and was offering a 15% discount to all new customers. Such a lengthy outage was unprecedented, he said. "We have lost our own website for a couple of hours, we have had warehouse issues, but they're very separate issues and this is a substantially bigger outage than we've ever had. To have totally stopped deliveries, shut down the site, and take no new orders - our guess is there's something fundamentally wrong."

Asda put a sponsored link on searches for the adword Sainsbury's on Google to advertise free deliveries on its own website. Tesco offered a £5 discount to all new customers saying it could "fully appreciate how disappointed Sainsbury's online customers will be right now".

The crisis came as the City gave a lukewarm respsonse to the retailer's first-quarter results. Like-for-like sales excluding fuel were up 3.4% compared with 4.1% in the previous quarter.

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