More than 800 jobs have been lost after the owner of 34 Budgens stores collapsed into administration.
Food Retailer Group, an arm of business restructuring specialists Hilco Capital, appointed PwC as administrator last month but the accountancy firm has failed to find a buyer for the group.
A total of 815 staff have begun the redundancy process.
Mike Denny, joint administrator at PwC, said: "Unfortunately, we have been unable to find a buyer and it is not commercially viable to continue trading the stores.
"We are working closely with the Co-op, Usdaw and the relevant government agencies to ensure that all employees receive the maximum levels of practical and financial support through the redundancy process."
Food Retailer Group bought the stores from the Co-operative Group in July.
At the time the firm said "there are no planned redundancies" and stores will continue "trading as usual".