City heavyweights John Peace and Niall FitzGerald have been shortlisted to replace Sir Philip Hampton as chairman of J Sainsbury, the £5.6 billion supermarket giant.

Sainsbury is hoping to pick its preferred candidate for the £396,000-a-year role to head the country’s third-biggest food retailer by its annual meeting on July 15.

Peace, 60, is chairman of Burberry, the fashion brand, and Experian, the FTSE 100 business information group. He is also acting chairman of Standard Chartered. Peace is expected to step down from the bank once a successor is found. Sir Win Bischoff, a veteran banker, is seen as a strong external candidate to replace him.

Peace, nicknamed the quiet man of retailing, was chief executive of GUS, a now defunct conglomerate that used to own Argos and Homebase.

During his tenure, the Nottinghamshire-born son of a mining family orchestrated a string of acquisitions, demergers and disposals.

FitzGerald, 63, is deputy chairman of Thomson Reuters and is keen to take a chairmanship. In recent months he has been approached on three occasions to become chairman at BP but turned down the offers.

The wealthy Irishman, who flirted with communism in his youth, spent three decades selling everything from Dove soap to Vaseline at Unilever, the household-goods group. He spent the past four years as its chief executive.

Hampton, a former finance director of Lloyds, is leaving Sainsbury after a successful tenure that was dominated by two takeover bids for the company, one from a private-equity group and the other from the Qatari royal family.

He decided to step down after becoming chairman of Royal Bank of Scotland. This role requires a lot of his time and Hampton, who trained as an auditor with Coopers & Lybrand after Oxford, felt it would be difficult to fulfil his duties at the bank and supermarket group as well.

Sainsbury’s search for a new chairman comes at a critical juncture for the supermarket chain, which is keen to increase its nonfood ranges and expand its online presence.

Under Justin King, its chief executive, the group has defied City expectations by delivering forecast-beating sales growth throughout the recession.

The company said last week that sales rose 7.8% in the 12 weeks to June 13 - almost double the growth rate at Tesco, its bigger rival. It also announced a £450m rights issue to fund a land grab across Britain.

King said the fundraising would allow Sainsbury to drive forward its biggest expansion in years.