"Our clear intention in July was to sell the business and lease the land and buildings to a new owner," said Allan Pollard, chief executive of Trust House.
He said despite interest from potential buyers, it had not been on terms that would have provided an acceptable return on the assets.
"The decision to close the business has been a difficult one and was based on the best overall financial return for Trust House," he said.
Intense competition from the newer, larger Fresh Choice supermarket which opened last year, had contributed to the original attempted sale of the business.
In June, Mr Pollard told the Times-Age he could give a categorical assurance that Trust House would continue trading if the business did not sell.
"We are not going to close up shop," he said.
The supermarket business closes on Sunday, November 24 but the bottle store will remain open until the land and buildings are sold.
Mr Pollard said the focus of the community-owned trust was on profitable businesses that would provide a sound financial return to the community.
"We are now investing in a number of new projects including a major redevelopment of the Featherston supermarket, cafe and bottle store and a new hospitality venue on the Horseshoe site."
Trust House bought the Greytown land and buildings and established the supermarket in 2000.
Fresh Choice opened in the town last year as a franchise business under the umbrella of Progressive Enterprises.
It is the first full-sized supermarket in Greytown's history.
