Iceland will not reopen its existing store in Lewes, East Sussex as repairs to structural damage caused by flooding are not "economically viable".
But the company said it had not yet ruled out reopening in the town if suitable premises were available.
And Safeway, which stands to benefit most from Iceland's withdrawal, is taking the flood-induced opportunity to refurbish its Lewes branch.
The company said the refurbished store, due to reopen on December 7, will have a redesigned layout, including a hot chicken counter, new meat department and a patisserie.
Somerfield's worst hit store Uckfield in East Sussex reopened this week, three weeks earlier than expected. The refurbishment, which cost £2m, came less than 18 months after the company had spent more than £1m on the store.
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