Another 70 Argos stores are to close as owner Sainsbury's relocates them into its supermarkets over the next five years.
Sainsbury's also announced it will close up to 15 large supermarkets and as many as 40 convenience stores, but will open around 10 big stores and some 110 convenience outlets.
Sainsbury's also announced its financial services arm would stop new mortgage lending "immediately".
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.
Sainsbury's said store closures will cut costs by £500 million over five years but warned cost-cutting will also impact first-half underlying profits by about £50 million, with weather and higher marketing costs also taking their toll.
The annoucement came as the group announced a 0.2% fall in like-for-like sales, excluding fuel, over its second quarter to September 21.
Chief executive Mike Coupe said: "Sales momentum was stronger in all areas and we further improved our performance relative to our competitors, particularly in grocery.
"We have focused on reducing prices on everyday food and grocery products, and expanding our range of value brands, which have been very popular with customers.
"At the same time, we are investing significantly in our supermarkets, driving consistent improvements to service and availability.
"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."
