Musgrave Group, the Ireland-based retailer, is to close its Galway depot with the potential loss of around 143 jobs.

The firm said today (5 March) that the closure, which is expected in June, is due to a “reorganisation” of its logistics network and will result in distribution functions being moved from Galway to its Kilcock and Cork sites.

Some 125 full-time employees and 18 part-time staff face losing their jobs. Musgrave said a 30-day period of talks with employees and their trade union representatives has begun.

The retailer said the closure will have no impact on the Musgrave Wholesale Partners cash-and-carry operation, located beside the Galway depot.

“This is a difficult time for all our colleagues on this site and our focus will be on assisting them as much as we can,” said Donal Horgan, managing director, Musgrave Retail Partners Ireland. “Where transfer is not an option, we are putting in place a significant outplacement support programme.”

The firm said that 55 new jobs are being created in Musgrave’s Kildare warehouse, less than an hour’s commute from Galway. The retailer said it hopes the roles will be taken up by some of the affected Galway staff, reducing the impact to 70 job losses.

“It’s one division in our business which is reorganising its logistic network in order to respond to the market changes in Ireland," Edel Clancy, a spokesperson for Musgraves told just-food. “They currently have five depots and they are reducing that to four. That unfortunately and very regrettably means we have to close Galway, which primarily stocks ambient dry grocery goods."

Food retail sales in Ireland suffered in 2009 amid a general slump in the country's retail sector. Retail sales dropped 14.1% in volume terms and 18% in value terms last year,

Clancy acknowledged it was a "tough time" in Ireland but she said Musgrave had no further plans for cuts.

"It was particular to that division and in response to a very difficult market that has contracted by over 7% over the lat 12 months," she said.

Clancy said that overall the group is pleased with the performance of its businesses in the UK, which include the Budgens and Londis chains.

“Musgrave is doing well overall despite the difficult circumstances in Ireland,” she added.