The Nisa Extra Supermarket at South Lane, Elland, closes next week with the loss of 17 jobs.
Its closure has been blamed on the impending arrival of a big-name supermarket in January.
Work is nearing completion on the new Morrisons store at Briggate which is creating 250 full and part time jobs.
Nisa is a major food and drink buying group which buys in bulk on behalf its members.
Nigel Mills has been running the Elland store and said the arrival of Morrisons will shake-up the town’s shopping.
“There would have been Morrisons, the Co-op and ourselves in a very small area,” he said.
“We believe our business would have traded at a substantial loss and therefore not be viable.”
The store shuts on Wednesday and the site at South Lane will be sold to a property developer.
Several of the staff have taken the opportunity to apply for jobs at the new Morrisons.
There have been hundrerds of applicants and more than 600 interviews scheduled over recent weeks.
The Morrisons development has also safeguarded 70 jobs in the town as the project included building a new factory for fire extinguisher firm Nu-Swift.