Supermarket giant Coles could axe up to 600 jobs from its Melbourne head office in an effort to cut costs and free up funds to drive grocery prices lower.

Coles wants to cut 500 to 600 jobs, or about 20 per cent of its workforce, at its Tooronga headquarters and is believed to be planning to send some of those jobs offshore, Fairfax websites reported.

The cuts will come primarily from “back office” roles like IT, accounts and payments, the newspaper said.

Sources told the paper some of the savings from the job cuts would be used to reduce grocery prices.

A Coles spokesman was not immediately available for comment.