New World Hawera will close its doors for the last time next month, leaving more than 50 people unemployed.
Foodstuffs North Island Ltd property development general manager Angela Bull said the company was securing its long-term viability in the township.
"A recent review of Foodstuffs stores found that due to the current size of the population and what is projected for the future, it will become increasingly tough to support three supermarkets in the town."
Bull said it was a decision they didn't take lightly, but believed the move would keep the store's sister brand, Pak 'n Save, in a strong position.
"It's the best decision to ensure we can continue to provide our Hawera customers with a strong Kiwi-owned and operated supermarket offering employment opportunities for the long-term."
She said the company would support the 32 full-time staff and 21 part-timers to find alternative roles at other Foodstuffs stores, including Pak 'n Save Hawera.
New World Hawera owner-operator Rachel Edgecombe-Clayton, who took over in 2006, said while she was disappointed the store was closing, she understood the logic behind the "very difficult decision Foodstuffs has made".
"The team at New World Hawera do a fantastic job and we're very much looking forward to continuing to serve our customers right up until the closing date of August 31."
Hawera Bizlink chairman Andy Beccard said he was saddened by the news.
"Admittedly it's hard for a community the size of Hawera to have three major supermarkets, he said.
"That's why we want everyone to shop local, to keep the Hawera economy going."
- Taranaki Daily News
What's your expectation of former tropical cyclone Pam?Related story: Cyclone Pam hits New Zealand
Get Taranaki's frequent news and sport updates
Get your mid week news fix
Get your South Taranaki news online