Irish supermarket group Superquinn has announced plans to cut 400 jobs - around 10% of its workforce - and close one store in Dundalk as it looks to cut costs out of the business.

The company said that its 'Programme for Competitiveness and Change' is designed to strengthen the company's trading position in a "radically changed market".

"This programme is necessary to secure the future of our business and to protect almost 90% of the jobs in Superquinn," said chairman Simon Burke.

Burke blamed the store closure on an increase in cross-boarder shopping, with Irish consumers increasingly going to Northern Ireland for their groceries.

According to the Irish Chamber of Commerce, the average shopping basket is 40% cheaper north of the boarder.

A spokesperson for Superquinn chalked this price difference up to a number of factors.

"The big thing is the VAT difference - it is 15% in the UK and 25% in Ireland. In the South there are also higher staffing costs; Superquin sources all of its products in Ireland - unlike UK supermarkets - and suppliers charge differing prices in the North and South; also, rents differ either side of the boarder," the spokesperson told just-food today (22 January).

Superquinn has opened formal negotiations with employees and their union representatives. The Programme for Competitiveness and Change will be implemented "as soon as possible," the company said.

In addition to the redundancies, Superquin said that it would ask its remaining staff to adopt more "flexible" working practices. The spokesperson said that these were likely to include changes to working hours.