It is part of Wesfarmers' five-year plan to turn the embattled Coles group around and take the battle up to its chief rival, Woolworths.

Coles boss Ian McLeod, who has been in the chair for a year, said the chain's prosperity rested on "fixing the basics", which included store sizes and getting the best returns on its portfolio.

Coles said it would transfer 45 supermarkets, as well as eight associated Liquorland stores, to independent food and grocery retail group FoodWorks for $35 million.

The stores have combined sales of $450 million a year.

Spread across the mainland eastern states and South Australia, they are about 1400 square metres against an average for the Coles group of 2100 square metres.

"They are significantly smaller than the average store … about 35 per cent below the company average by square metre," Mr McLeod said.

"Our focus has got to be, in the early stages of the turnaround, to drive better returns out of our existing estate and larger stores in higher population density areas with limited overlap — (these) are going to be the ones where we want to focus our attention."

He said Coles was sticking to its broader plan to improve its network of more than 700 supermarkets and 600 Liquorland stores.

"We'll continue to focus on landing the right store formats in the right locations across Australia for our customers," Mr McLeod said.

The transaction with FoodWorks is subject to Australian Competition and Consumer Commission approval and the approval of FoodWorks' shareholders.

Coles will support the purchase through a secure vendor finance facility.

Since the merger of Australian United Retailers and FoodWorks in 2004, FoodWorks' store network has increased to more than 700 stores.

Chief executive Peter Noble said the purchase delivered the most significant growth for the company since its 2007 internal capital raising of $10.5 million.

"Our focus over the last two years has been on new store development," he said.

"These stores have a significant industry footprint and will allow the company to quickly and cost effectively develop our ongoing Australian growth strategy."

Ownership of the stores will be transferred to FoodWorks over the next nine months.