Our decision not to support sales with massive non-profit making lines, particularly in the area of beer, was the right one

Bill Grimsey, chief executive Iceland

Now the company is looking to repeat successes from previous years during 2002 by going back to value-for-money basics.

Iceland has grown from a rented shop in Oswestry in the 70s to a chain which was worth £1.3bn before its fortunes waned.

In 1997, it launched a home delivery service through a call centre in Deeside, followed by an internet service in 1999.

The coming 12 months will see Iceland trying out four new store formats as part of a scheme to create 80 stores over the next three years.

Iceland chief executive Bill Grimsey stressed that he wanted to see Iceland's profit targets met in the coming months.

He said Iceland was involved in a "recovery process" and the chain had focused hard on making Christmas a success.

Iceland's organic range was not a hit

"Our decision not to support sales with massive non-profit making lines, particularly in the area of beer, was the right one," he explained.

Mr Grimsey - who became chief executive last January - said he was pleased by figures showing store sales had recovered at the end of 2001 after a disastrous attempt to switch a large section of produce over to organic food.

But the company remains heavily in debt, despite reducing the figures by £70m to £425m.

Christmas sales at Bookers were slightly up by 1.5%, adding to the recovery picture.

The entrepreneur - who led the way in banning GM food and offering internet home shopping - opened a new freezer store called Cool Trader in Wrexham, in July.