The Checkers Xpress store near St Andrews Park will close permanently on Saturday.
Owner SandpiperCI says the main reason is because many shoppers are using the nearby Morrisons Daily and Checkers Xpress at First Tower.
A spokesman adds that the 20% tax targeted at local retailers 'has made it difficult to justify keeping loss-making stores open'.
The shop is on La Route de St Aubin between First Tower and Millbrook.
The five staff will be redeployed to SandpipersCI's other nearby stores.
The news comes after First Tower residents successfully campaigned to keep their nearest Checkers Xpress store open.
Last September the competition watchdog changed its mind about forcing SandpiperCI to close the shop.
New safety measures at Victoria Marine Lake following serious incident
Normans backs Channel 103 celebration of outstanding customer service
Police investigating crash near rugby club
Police chief praises 'positive and good-humoured' football fans
Channel Islands poised for third heatwave of the year
Two dads running 50km to get young stars to Dance World Cup final
Jersey told to avoid Victoria Marine Lake after child pulled through seawall
Jersey pubs can stay open later for England vs Mexico
