Supermarket giant Tesco on Wednesday announced plans to cut 1,200 of its head office positions as part of ongoing cost-cutting at Britain's biggest retailer.

"We anticipate reducing our number of roles in the (head) office by around 25 percent, or 1,200 roles" at the group's offices in Hatfield and Welwyn Garden City, a company spokesman told AFP.

He added: "Today we have shared with colleagues across Tesco changes that we plan to make to the way we operate our business. 

"This is a significant next step to continue the turnaround of the business."

Tesco is undergoing vast cost-cutting under chief executive Dave Lewis and last week revealed plans to axe 1,100 jobs with the closure of a call centre in the Welsh capital Cardiff.

Lewis was parachuted into Tesco in July 2014 in a bid to turn around its fortunes at the group, which posted a record loss in 2014/2015.

He has since launched a deep cost-cutting drive and sold a series of assets.

"Over the past three years we have been making changes to improve the way we serve our shoppers better and are seeing good progress," the spokesman added on Wednesday.

"However, the retail environment remains challenging.

"We have already responded by making changes to simplify the way we operate our stores and distribution, and now we are introducing further changes to improve the way we run our office."

Tesco is the world's third-biggest supermarket chain after France's Carrefour, with US giant Wal-Mart in the number one spot.

Lewis had warned earlier this month that Tesco faced "tough market conditions" in Britain, as soaring inflation results in higher shop prices and squeezes consumer spending.