Iceland said it was well placed to weather the current supermarket price war after a year in which its underlying sales held firm but profits dropped.
The frozen food retailer, which has 833 UK stores and employs 25,500 staff, saw earnings fall 11% to £202.2 million in the year to March 28 due to the cost of rolling out a new online service and expanding abroad.
Sales were up 2.7% to £2.7 billion and unchanged on a like-for-like basis after a year of intense competition as the four major supermarkets cut their prices in order to grapple with discount rivals Aldi and Lidl.
The Deeside-based business said the sector was undergoing a period of major change but that it outperformed the leading multiples through its range of products, good store locations and pricing strategy.
With its online investment, Iceland said it had a "st rong and defensible platform in a potentially difficult trading environment in the year ahead."
During the year the group opened 46 stores and rolled out a new online home delivery service to 280 stores. It also bought out its seven-store Irish franchise operation in readiness for a major expansion drive in the country.
During the year Iceland launched frozen Hula Hoops and McCoys crisps as well as bagged ready meals for £2.
The business said this year it plans to open 40 new Iceland stores in the UK, creating up to 1,250 jobs and complete the roll-out of its online service to the rest of its UK stores.