The operators of Spar's flagship convenience store on Merrion Row in Dublin, paid €950,000 in December to buy out the lease on a rival Centra store next door.
The lease was held by Enda Martyn, an experienced retailer, who runs three other Centra shops in Dublin and one in Limerick.
This highly-unusual move by BWG, which operates the Spar and Mace franchises here and is one of the State's biggest grocery wholesalers, has effectively reduced competition on the bustling street, which is close to St Stephen's Green and Government Buildings.
The Centra chain is operated and supplied by Musgrave, a large Cork-based rival of BWG.
It is understood Mr Martyn's shop experienced a €10,000 a week fall in its sales after the Spar shop opened in January 2006.
The Centra store, which was close to the Huguenot cemetery, was long and narrow, offering little opportunity for Mr Martyn to develop a significant rival food and coffee offering. It closed in December with staff offered transfers to other Centra stores.
It is understood the deal was brokered by John Clohisey, who, along with Leo Crawford and John O'Donnell, acquired BWG for €390 million last October. The lease on the Centra shop is expected to be offered for non-retail purposes. Spar is not expected to expand its Merrion Row outlet.
Spar's shop covers 3,000 sq ft and was formerly an Irish Ferries office. It opened in January 2006 as part of a €4 million pilot scheme of a new store format at three outlets in Ireland that offered an enhanced food service.
It includes an Insomnia coffee shop, the Treehouse juice and smoothie bar and a substantial food-to-go counter, offering hot and cold meals. It also has a seating area and a large off-licence.
The Spar shop is thought to require turnover each week of about €110,000 to break even. Removing Centra from the street has given it the opportunity to enhance its own sales.
In a statement, Centra said Mr Martyn had "traded successfully" at Merrion Row for three years.
"Spar had, for six months, continually offered to buy the leasehold of Centra, Merrion Row, from Enda Martyn. Enda has accepted a generous offer for the leasehold."
This move calls into question the viability of some convenience stores, with some areas seeming to be close to saturation in some areas.
On Monday, Centra said its sales in 2006 increased by 17 per cent to €1.2 billion. It opened 47 new stores at a cost of €51 million and spent €24 million revamping 64 others.
Donal Horgan, Centra's managing director, said the group plans to open 37 additional shops in 2007.
