125 Sainsbury's and Argos stores to close in major overhaul, as building work is under way at Sunderland store
Sainsbury's has said it will close up to 70 Argos stores, 15 supermarkets and 40 convenience stores amid a major overhaul to slash costs.
The group said it will also open around 10 big stores and some 110 convenience outlets under the plan, which it insisted will increase its store estate.
The company declined to say how many jobs would be impacted by the changes.
Work is already under way at Sunderland North Sainsbury’s, off Wessington Way and staff said this was to create an Argos within the store.
The five-year plan, being led by chief executive Mike Coupe, is set to cut costs by around £500 million over the next five years and comes after the failure of its ill-fated £7.3 billion takeover tilt for rival Asda.
Sainsbury's also revealed narrowed sales declines in its second quarter, but warned over a £50 million hit to underlying half-year profits.
It blamed the interim profits warning on the impact of cost cutting, with weather and higher marketing costs also taking their toll, though it stuck by full-year forecasts.
Sainsbury's also announced its financial services arm would stop new mortgage lending "immediately" as part of its five-year plan.
It comes amid reports the group is looking to sell off its mortgage book, following rival Tesco's recent move to offload its home lending business.
Details of the plans came as Sainsbury's announced a 0.2% fall in like-for-like sales, excluding fuel, over its second quarter to September 21.
This marked an improvement on the 1.6% fall seen in the previous three months.
Sainsbury's said like-for-like grocery sales rose by 0.6% in the second quarter, but this was offset by a 2% drop in general merchandise sales - which includes the Argos business.
Mr Coupe said: "Sales momentum was stronger in all areas and we further improved our performance relative to our competitors, particularly in grocery.
"Argos continued to grow market share in key categories, but sales were impacted by reduced promotional activity and the timing of new product releases in gaming and toys."