Safeway said that having built up a loyal customer base through aggressive pricing the focus now was a “full margin sales drive" to persuade customers to shop in its stores more often.

In a conference call, Safeway’s finance director Simon Laffin said: “The sector is very competitive, with everyone playing the ‘promotional game’.

“We tend not to play other people's game. We will continue to play on our current strategy.”

The group has launched 900 new products this year, many of them in fresh categories and said that sales of chilled ready meals had increased by 28%.

S far this year, 40 stores have been reformatted with four second-generation megastores launched and produced first half like-for-like sales growth of 1.9% with total sales up 2.2%.

Safeway expects nearly half its selling area to be reformatted by the end of the year and anticipates sales from this space to build in the final quarter.

Laffin reiterated that the group planned to stay independent despite the persistent takeover speculations by rival Asda.

Safeway’s interim results are due out on November 21.