A supermarket supply firm has made a third of its staff redundant.

And the jobs of a further 153 workers still hang in the balance.

Clares Retail Equipment, which has a large factory in North Star Avenue, went into administrative receivership on Monday.

Business experts from KPMG, who were called in to oversee the running of the company, said it was their intention to sell the firm as a going concern.

But just 24 hours later, 85 of the firm's 238-strong staff were informed they were no longer needed and should leave the premises immediately.

The redundancies have been split between manufacturing and administration.

The firm makes and maintains trolleys, shelving, checkouts and kiosks for supermarkets, but KPMG said its business had dipped recently.

KPMG's Richard Hill said increased competition from cheaper imports had forced the firm into financial difficulties.

He said trading had picked up, but cashflow pressures had resulted in directors requesting the bank to appoint administrative receivers.

Sister firm Clares Merchandise Handling Equipment in Wells, Somerset, is also in administration, but has so far escaped any job cuts.

The business is the UK's largest manufacturer of supermarket trolleys, baskets, roll containers and luggage trolleys.

The two plants have a combined turnover of £40m.

Myles Halley, joint administrator and KPMG partner, said: "Following a review of the business it became apparent that some redundancies were necessary to enable trading to continue.

"We will continue to review the options for the remaining parts of the business and are still seeking offers for the business as a going concern."

It is not the first time that Clares has announced major job losses.

In January 1981, more than 100 shop floor workers went on strike in protest at the news that 83 of Clares' 235 employees were to be made redundant.

The latest redundancies come a little more than a year after Clares won a silver award at the UK-wide In-Store Awards.

And just before Christmas, the company significantly increased its sales after winning a 20-month contract to supply 165,000 trolleys to supermarket giant Tesco.

Phil Bigland, Clares' group sales and marketing director, described the contract award as a proud day for the firm.

Nobody from the firm was available for comment last night.