Superquinn is to cut 400 jobs and close a store in Dundalk as part of a cost-saving plan which, it says, has been forced upon it following "recent developments in cross-border shopping".
In a statement emailed to staff this afternoon, company chairman Simon Burke said the cuts were necessary to enable it to operate in a "radically changed" business environment.
He said recent developments in cross-border shopping had left the store with no alternative but he expressed the hope it would be able to "avoid any other closures as part of the programme.”
Mr Burke said the redundancy programme was needed "to secure the future of our business and to protect almost 90 per cent of the jobs in Superquinn”.
He said the measures would provide the supermarket chain with "a competitive trading base and avoid putting all of the jobs in Superquinn at risk".
Superquinn, which employs 3,300 people in Ireland has opened formal negotiations with union representatives and wants its Programme for Competitiveness and Change tobe implemented "as soon as possible".
Last November Mr Burke warned of substantial job losses in the retail sector after Christmas as a result of the financial downturn and the flow of shoppers crossing the Border.
He described sales figures in the last week of that month as the worst for more than a decade and said the sector was expecting a bad Christmas season and a "worse" New Year.
The trade union Siptu said it would engage with the company on its proposed plan in order to preserve as many jobs as possible.
“We appreciate the difficulties the company faces but we will be insisting on keeping job losses to a minimum and ensuring they are on a voluntary basis," said Peadar Nolan of Siptu.
Mandate's assistant general secretary Gerry Light said, "People need to stop talking about the potential impact of cross-border shopping. We are seeing today that this is really happening - people are losing their jobs because people are not shopping locally to support local business.
"I would urge the Government to take these urgent matters on board and to bring in incentives for people to shop local."
He welcomed the union's direct involvement in negotiations with Superquinn with a view to protecting as many jobs as possible and retaining terms and conditions for Superquinn employees.
Fine Gael enterprise spokesman Leo Varadkar called on the Government to review electricity prices and to insist that the ESB cuts costs as well as prices.
He also said the Minister for the Environment must impose a freeze on local authority rates, and that the Minister for Finance must reverse his "ruinous" decision to increase VAT.
Labour Party enterprise spokesman Willie Penrose said the had "no doubt that the government decision to increase VAT in the October budget, just as VAT was being decreased in Northern Ireland, has been a significant contributing factor in these losses".
Mr Penrose said members of the Oireachtas Committee on Enterprise, Trade and Employment, of which he is chair, will travel to Northern Ireland next week to look at the reasons for the North-South disparity in the cost of many goods.