By Ian Walker

LONDON--J. Sainsbury PLC (SBRY.LN) has become the latest supermarket chain to cut jobs as part of a review of its stores in an increasingly competitive economic and retail environment.

The number three grocer by market share said it will review department and deputy manager positions in its stores and invest in other shop floor roles, as well as replace the night shift with early morning and evening shifts in some stores. While Sainsbury expects to redeploy some staff, the changes will result in the loss of 800 jobs, it said.

The grocer expects to save 500 million pounds ($747.67 million) over the next three years from these changes, which will be used to help fund future investment in other areas such as service, price and quality.

"Reducing the number of department manager roles will give colleagues who serve customers on tills and restock the shelves the opportunity to extend their hours or take additional shifts. This means more customer-facing colleagues will be on hand to offer service, with the right leadership and structures in place," Sainsbury said.

It has already started consultation in over 100 supermarkets on proposals to change the way they are restocked overnight.

"The formal consultation starts today and, where possible, we hope colleagues will opt to move to other roles or stores. 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," Retail and Operations Director Roger Burnley said.

Last week Wm. Morrison Supermarkets PLC (MRW.LN) announced it is slashing roughly one third of the jobs at its head office, continuing his overhaul of the U.K.'s fourth largest supermarket chain.

The Bradford, England-based retailer is cutting 720 jobs at its head office, where the number of people employed has jumped 50% since 2008 to more than 2,300. At its supermarkets, the company is recruiting 5,000 staff to increase availability and open more check outs.

Britain's supermarkets are in the midst of a fierce battle for market share with German discounters Lidl and Aldi, which attracted customers during the recession with their bargain prices. The latest data from industry body Kantar shows that Morrisons lost market share in the 12 weeks running to the end of March.

Tesco PLC (TSCO.LN), Britain's largest supermarket chain, has also been putting more staff on the shop floor as part of a larger move to defend market share. Tesco's new Chief Executive Dave Lewis has closed unprofitable stores and reduced Tesco's product lineup, and has also said he wants to sell some noncore assets.

On Wednesday, Tesco reported the steepest ever full-year loss for a British retailer. For the year to Feb. 28, Tesco's pretax loss was GBP6.38 billion ($9.52 billion), versus a profit of GBP2.26 billion a year ago. The company logged charges of GBP7 billion, including GBP4.7 billion tied to the impairment of fixed assets.

-Saabira Chaudhuri contributed to this article.

Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

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