HONG KONG—Hong Kong's richest man is planning to sell his company's flagship ParknShop supermarket chain, one of two that dominate the city's grocery business, in a deal that could fetch between US$1 billion and US$2 billion, people familiar with the matter said Friday.

Hutchison Whampoa Ltd., which is controlled by Li Ka-shing, has hired Goldman Sachs Group Inc. and Bank of America Merrill Lynch to handle the sale of ParknShop, the people said, adding that details of the company and sale will be sent to potential bidders...