Sainsbury's store in London
Shopping trolleys are seen parked at a Sainsbury's store in LondonREUTERS

Supermarket chain J Sainsbury is axing 800 jobs as part of an initiative to save £500m (€698m, $749m) over the next three years, as the retail sector is hit by falling profitability amid an intense price war.

Sainsbury's said it will remove "department and deputy managers" from some stores, according to media reports. In addition, it will replace its night shift with early morning and evening shifts to improve the availability of key products for shoppers.

The changes will affect thousands of staff, but the retailer expects to redeploy some of them with other posts.

"Redeployment opportunities will be available for most affected colleagues and a consultation is now underway to discuss individuals' options. However, it is expected that these proposals will result in around 800 fewer roles," the company said.

"These are exceptionally difficult decisions to make and we have not taken them lightly. I recognise that this will be a challenging time for many of our colleagues and we will do everything we can to support them and help them move through this period of uncertainty as quickly as possible," Roger Burnley, retail and operations director said.

"We expect the new structures to be in place later this year and as a result, we will be set up to work more effectively together to better serve our customers."

The restructuring decision from Sainsbury's comes amid stiff price competition from discount retailers such as Aldi and Lidl. The move is expected to help the retail chain cut prices and modernise its stores to attract more customers.

The company shares are trading up 0.95% at £2.655 as at 11am GMT.