BOSSES at Sainsbury's have announced that it will close up to 125 Argos stores and supermarkets after a dip in profits.

The group revealed that although it will be shutting up to 70 Argos shops it will be opening 80 in its supermarkets across the country.

There are also plans to close up to 15 large supermarkets and as many as 40 convenience stores.

Again, bosses said it will open around 10 more big stores and 110 convenience outlets.

They did not say how many jobs would be impacted.

It is also not known what stores will be closed or where the new supermarkets will open.

The news was revealed as part of a five-year plan, being led by chief executive Mike Coupe, which sets out 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.

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."