Safeway is to close two supermarkets in Northern Ireland with the loss of almost 200 jobs, less than a year after moving into the region in a joint venture with Fitzwilton, taking over the Wellworth supermarket chain, which had previously been wholly owned by Fitzwilton.

Safeway is to shut stores in Derry and Portadown, Co Armagh, tomorrow, the company said. But Safeway insisted its commitment to Northern Ireland remained and millions of pounds were being spent on new stores and upgrading existing ones.

Mr Garry Billing, Safeway retail operations manager, said: "We are obviously disappointed to have to announce these closures. The decision has only been made after a careful examination of the stores and related trading issues."

The Derry store is being shut because a recent planning decision would fundamentally change existing trading patterns and adversely affect its business. However the company is looking for a new site, he said.

The Portadown store was closing because the company had been unable to turn around a loss-making operation.

The company moved into Northern Ireland last year when it took over 15 locally-run Wellworth stores and set up a joint venture company with their existing owner, Fitzwilton, in a deal worth hundreds of millions of pounds.

Mr Billing insisted Safeway's commitment to Northern Ireland remained, adding the company still had 13 former Wellworth stores across the North in which it had full confidence and which were in various stages of being upgraded and reformatted to the Safeway brand.

A number of new stores were being built, including three which would open this year.