The money will help retailers refurbish stores and bring their offer up-to-date by offering more fresh, chilled, hot food to go and café-style seating areas.
"We have to help retailers get to a standard that fits the Spar brand," said MD John Pattison at Appleby Westward's trade show.
"This allows us to ensure that range is contemporary and space is aligned with market trends. We will be making this significant investment during the year and by working together and investing in each other the future for us all is great."
Five "fairly chunky investments" were already lined up to take place within the next few months, he added. The scheme would help attract new retailers to the Spar fascia over the course of the next year to add to the 301 stores in the south west of England already supplied by AWG, said Pattison.
He also announced that improving the company's chilled offer would be his main priority this year.
"We've been looking at our entire chilled supply chain to find ways of improving our offer to retailers and by the end of the year we will have a very different offer," he said.