Safeway believes that there is potential for 280 Cafe Fresco in-store restaurants and is continuing its recovery strategy by putting more emphasis on higher-margin products.
Chief executive Carlos Criado-Perez said Safeway has learned lessons from the early Cafe Frescos - there are 16 at present - and now has a more highly-developed format that can be rolled out to as many stores as have sufficient space.
A spokesman added: 'We now have a model that we can continue with. It is a smaller format (than the original) and can replace our in-store coffee shops.'
Safeway is also changing its promotional strategy by pushing higher-margin products on its marketing flyers in an attempt to increase average customer spend.
The grocer is gearing up for a new product development push, expanding and strengthening its premium, healthy eating and ready meal ranges.
On Tuesday, Safeway unveiled like-for-like sales growth of 1.9 per cent for the first half.