Up to 20 people are set to lose their jobs after it was announced that Tumbarumba's Foodworks store is set to close.
A staff meeting on Tuesday night was told the store would be closed in four weeks' time, with staff being made redundant.
According to people who attended the meeting, the staff were told there were plans to use the premises as the location for a bottle shop, with the possibility of employment for only a handful of the former supermarket workers. There were no offers of counselling or support, they said.
Store staff told The Daily Advertiser on Wednesday that they were unable to comment on the issue.
However, Ken Dale, president of the Tumbarumba Chamber of Commerce, said the closure was a blow to the community.
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The town also has an IGA supermarket, which has the same owner - the Singh Group - as the Foodworks store.
Mr Dale said the Foodworks store had been sold about a year ago. He said there were concerns about how the closure would affect the community.
"This has happened just after there were budget cuts by Snowy Valleys Council that have affected parks and gardens work," Mr Dale said.
"We are a tourist town and these are the things that will affect us."
Mr Dale said many residents in Tumbarumba were already concerned about the level of services available to their community. He said the town was likely to be shortly reduced to just one GP.
There were also concerns, he said, about the future of some aged care and childcare facilities, which had been operated by the old Tumbarumba Shire Council, but may not continue under Snowy Valleys Council.
Tumbarumba residents are continuing their push to de-merge Snowy Valleys, which comprises the former Tumbarumba and Tumut shire councils.
Neil Hamilton, from Save Tumbarumba Shire, said the group had just met with Deputy Premier John Barilaro to air their concerns about the council merger and were now hoping to speak with Minister for Local Government Shelley Hancock, which they had been seeking for some time. He said the closure of the store was "another hit" to the community.
The manager of the Foodworks store told The Daily Advertiser that no comment would be made.