The Co-op is set to open 50 new stores by December, amid "exceptional" demand, spurred by the coronavirus pandemic.
The retail chain said 50 new supermarkets will open over the next three months, in addition to 100 store refurbishments.
It also will invest 'some extra income' into lowering food prices to remain competitive as 'price becomes the dominant consumer consideration in response to a deep recession'.
The £130million investment will also include an extension of 15 stores and a refurbishment of a further 100 stores.
It said the move will create 1,000 jobs before the end of the year.
It comes after food sales rose 5.2% to £3.9billion in the six months to July 4.
The growing trend of local shopping also helped its convenience stores Nisa, which saw wholesale revenues rise 14% to £801million.
Despite growing competition and the supermarket not expecting the same peak in sales seen in recent months, chief executive Steve Murrells said the group was 'well positioned".
Customers shopping closer to home also helped the Co-op's convenience stores Nisa, which saw wholesale revenues rise 14% to £801million.
"As we look to the rest of this year and in to 2021, we expect there to be on-going costs related to Covid-19 but on a lesser scale than in the first half," he said.
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"Meanwhile, we'll be investing some of the extra income from the start of the year into food price reductions in the second half as our members and customers start to feel the impact of the recession."
The Co-op Group overall, which also includes its banking and insurance business, saw total revenues increase by 7.6% to £5.8billion in the first half of 2020.
The group said the coronavirus crisis had a total impact of £54million on its half-year figures and expects this to rise to £97million by December.
