United Co-operatives intends to break through the 700-store barrier within three years - thanks to a £150m investment in its food business.

Tim Hurrell, general manager for United Co-operatives' Food Group, said the society would use the money to open 150 new stores and modernise its existing 529-strong network.

About £50m would be spent each year for the next three years, with £60-£70m set aside for acquisitions and new store openings and £80-£90m for modernising existing stores.

There are plans to open about 50 new stores a year - with overall store numbers boosted by acquisitions such as those of Leeds Co-operative Society and Sheffield Co-operative Society, both of which will merge with United Co-op by the end of this month.

These deals will give the group an extra 60 stores and 1,200 more staff. Hurrell said that 30 of these stores would be refurbished this year, with the remaining 30 tackled in 2008. "Our plan is to bring the stores in line with our own format," he said.

United Co-op was eyeing further acquisitions and if a group of stores became available the society would consider it, he added. Of the existing stores in the United Co-op portfolio, 120 were scheduled for redevelopment this year with projects ranging from minor works to full refits.

Layouts, decor and product ranges were expected to get a makeover. The group's fresh foods and food-to-go offers would be expanded.

"It's a Forth Bridge job," said Hurrell. "We are continuing to evolve our layout and format, so once all the stores are modernised, we have to go back to the first."

Christmas trading exceeded expectations, with like-for-like sales growth of 6.4% in its food stores for the four weeks to 30 December. Its convenience stores recorded like-for-like growth of 8.6% during the period.

In the week before Christmas, food sales hit a record £20.1m, beating the previous record of £19.6m set in the same week the year before.