The Big Food Group - the new name for Iceland - plans to spend £375 million sterling on a strategy to halt a sharp fall in sales.
Up to 80 new Iceland stores are set to open by 2005 with a renewed focus on frozen food in an effort to win back customers on the high street.
Ten more home shopping picking centres are also planned alongside a concerted bid to win more business in the contract catering market.
Big Food intends to fund the three-year recovery drive through a sale and leaseback deal on Iceland stores and new funding from banks and the City.
The new strategy comes after a torrid 14 months for the group, which lost its founder Mr Malcolm Walker after a controversial share sale a year ago.
Sales were hit by a move into the organic food market as the group counted the costs of buying cash and carry chain Booker.
New chief executive Mr Bill Grimsey was forced to issue a series of profit warnings last year as the group's share price nosedived 45 per cent.
But Big Food says sales across its 760 Iceland stores are still on the slide, down 3.7 per cent on a like-for-like basis in the eight weeks to March 1st.
Sales at Booker also fell over the same period, by 2.1 per cent, and the declines meant the group's like-for-like sales fell 2.4 per cent.
Big Food reports results for the full-year to March 31st in May and analysts are expecting pre-tax profits of £40 million. The group says its recovery drive will improve its return on investment but added the increased costs would hit profits by around £10 million a year.
PA