UPMARKET supermarket chain Waitrose is to close the Durham City store it opened just over two years ago because it is making a loss.

But the company plans to continue its expansion northwards by opening a 10,000 sq ft supermarket in Newcastle's Eldon Square - at about the same time the Durham store closes.

The 18,000 sq ft Durham store, in The Gates shopping centre, was one of five Safeway supermarkets it bought from Morrisons and has 103 employees, or "partners".

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Waitrose managing director Mark Price said: "The decision to close our Durham branch was not a decision we took lightly, and was made after long and careful consideration.

"We made a major investment in the Durham City branch, with every expectation that the shop would be successful. We understand the disappointment this decision will cause, however, the store has traded at a loss since we opened two years ago.'' He added: "Unfortunately, despite the best endeavours of our partners and investment in branch marketing, we have not been able to return it to profit."

A spokesman said the firm would try to find staff alternative jobs within the group, or give them redundancy money.

Waitrose, which has since opened a supermarket in Hexham, Northumberland, will employ about 100 people at the Eldon Square supermarket, which will be next to a John Lewis store.

Durham's Labour MP, Roberta Blackman-Woods, said: "It is great the city was able to attract Waitrose in the first place and I was one of those campaigning to bring the company in.

"But the local authority must now look at why supermarkets appear not to be able to be maintained on that site.

"In particular, we need better public transport serving the Gates, as well as better parking provision, to make the site more attractive.

"I will be discussing with Waitrose and the Gates how we can secure a replacement supermarket on this site.

"I think maybe splitting the current shop into two different units may be a way forward.

None of us wants to be in the same position in two years' time, which is why the underlying problems need addressing."

The only other supermarket in Durham city centre is Marks and Spencer, although there are big Sainsbury's and Tesco stores on the outskirts.