Sainsbury's reveals plans to close supermarkets and Argos stores

The company declined to say how many jobs would be impacted by the changes.

Sainsbury’s announced that it will shut up to 70 Argos shops as well as close up to 15 large supermarkets and as many as 40 convenience stores.

However the group will also open 80 Argos outlets inside Sainsbury’s stores will open around 10 big stores and some 110 convenience outlets.

The company insists the plan will increase its store estate.

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 per cent fall in like-for-like sales, excluding fuel, over its second quarter to September 21.

This marked an improvement on the 1.6 per cent fall seen in the previous three months.

Sainsbury's said like-for-like grocery sales rose by 0.6 per cent in the second quarter, but this was offset by a 2 per cent 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.’