Tesco is cutting 400 jobs across its stores and head office management, after revealing it is embarking on a major efficiency programme to “simplify” the business.

The supermarket said the cuts were caused by the “more competitive than ever” grocery market, which meant it has to find new ways to invest in price.

Tesco UK CEO Matthew Barnes announced Tesco had begun talking to colleagues about a series of proposed changes in stores and head offices, saying it was looking for “new, more efficient ways of working”.

Among those impacted include staff at Tesco bakeries, where the supermarket aims to move away from scratch baking in stores to more continental deli-style products, cutbacks to management in Tesco Mobile phone shops, and a raft of head office management positions.

Tesco also announced today it would in the coming days launch a consultation over the closure of its Snodland Distribution Centre, in Kent, on the back of previously announced plans to invest in a new distribution centre in Aylesford.

It said the Aylesford site, just three miles from the Snodland DC, was larger with new technology and improved facilities for colleagues – and that all colleagues at Snodland would be offered a role at the new site.

Tesco’s announcement of job cuts comes despite the supermarket recording its “biggest ever” Christmas sales, with sales at UK stores up 4% in the six weeks leading up to 4 January, as well as a dominant market share position.

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Barnes said: “These are difficult decisions affecting our colleagues, but we believe they are necessary to enable us to invest in what matters most to our customers.

“Our priority is to support impacted colleagues, and we will do everything we can to help them find alternative roles within our business. Today, we have almost 1,000 vacancies available.”