The Co-op has announced plans to develop a new £5m store to replace its existing branch in Castle Douglas.
The Co-op is planning a major expansion in Castle Douglas
The announcement ends uncertainty about the future of the company's presence in the town following the opening of a Tesco outlet in March.
The Lothian, Borders and Angus Co-operative Society says it hopes to have its purpose-built store in Castle Douglas open for business next year.
The supermarket group has been trading in the town for almost 100 years.
The new Co-op store will be built beside the existing branch in Cotton Street which employs about 100 full and part-time staff.
The company says the decision to make the £5m investment is in recognition of the level of public support for the store.
There had been fears that the future of the local outlet would be threatened by the opening of a new Tesco store in the spring.
A Co-op spokesman said the impact had been minimal with little change in customer numbers.