SAINSBURY's is understood to be planning a new store and hotel complex in Newport which could create around 200 jobs.

The commercial development on land at Crindau, which would also include non-retail units as well as a budget hotel, would mean the closure of its existing store at Shaftesbury.

The company plans to transfer staff to the new seven-acre location on former industrial land about a mile away.

The new store would require around 50 extra staff and the rest of the development about 150.

The company has made a planning application to Newport city council. Sainsbury's had been expected for some time to make a decision about its Newport operation, which has proved popular on a riverside site near Newport Castle.

A move to Crindau would enable it to expand its products to include a value-for-money range available at stores in other parts of the UK.

The application is being made by the company's property arm, which also sees Crindau as an area where it might get permission for a scheme much larger than a simple store replacement.

It is still negotiating with the owners of the Crindau land. Newport''s supermarkets are geographically well placed to take their share of customers in the city, and there are no reports that any of them are struggling, though Sainsbury's, like Asda, has only one store compared with Tesco's two. There is no Safeway in Newport.

Nationally, there is intense competition among the big supermarket companies for market share.

Sainsbury's has just recorded total sales growth of 3.9% for the 16 weeks to October 12. Peter Davis, group chief executive, said the company was continuing to make solid progress on sales in a period of "significant internal change and despite a slower market".

Sainsbury's is in the second year of a business transformation programme and is making significant progress upgrading the business.