SUPERMARKET chain Sainsbury has hinted it could agree the sale of its Homebase DIY division within weeks as the group unveiled a "progress report" ahead of half-year results next month.

Group chief executive Sir Peter Davis said he was pleased with the progress Sainsbury had been making on his three-year plan to turn the business around.

And while the group had no further news on the possible sale of its Homebase division, the strategic review of the business, which could include its disposal, "would take a few more weeks to complete".

The three-year plan has three components - update the group's IT infrastructure, improve the depot network and upgrade the store portfolio.

On the first of these, plans to outsource IT and technology systems to Andersen Consulting was "well advanced" and would "give us a totally new platform for our systems within two and a half years", said Sir Peter.

Three new depots will be built in Warwickshire, Rugby and, Waltham Point on the M25.

Sir Peter added: "Over the past six months we have increased our investment significantly in new product development to upgrade the quality of our products, the quality of our food innovation and our food integrity.

"As part of this drive next year we will start increasing significantly the space available for fresh and chilled products by improving display techniques making better use of more limited grocery and non-food space."

Next month would also see the launch of the chain's Taste The Difference range of 350 products, and the ultimate aim was to generate "margins that will compare with the best in the industry".

"I am confident that we are on track to achieve our goal of being first for food in the UK," he said.

Current sales and profits in the supermarkets division were running in line with expectations, he added.