The battle between supermarket giants Coles and Woolworths has escalated, with Coles using an elaborate tax haven structure to conceal its purchase of one of Woolies' most profitable stores.

Fairfax Media has obtained documents that reveal its arch-rival Coles is now the landlord of its supermarket in Sydney's Neutral Bay.

The move has blindsided Woolworths, which was unaware that one of its most profitable stores was bought by Coles for $40 million.

''This is a surprise, and it's not common practice by any means. I'm not going to commentate on what Coles' motivation is. That's for them to answer,'' a Woolworths' spokeswoman said after Fairfax Media informed the group.