Kwik Save is expected to go into administration, leading to the closure of 90 stores and loss of 1,100 jobs.
Negotiations are underway for 56 stores to be rebranded as Fresh Express.
The staff had been unpaid for the past six weeks. Those employed at stores that are closing will have to apply to the government to get a proportion of their back pay.
Four readers tell us about their experiences.
TRACEY SANDIFORD, ROSSENDALE
Tracey Sandiford got the bad news when she arrived at the start of her working day.
I went to work this morning as usual to find our auditor sat outside.
I asked, "Are you shutting us down?" to which she replied "Yes," nearly in tears.
We were told we had been made redundant and if we stayed to help, we would get a week's wage.
What does that mean? Because we have not been paid for six weeks.
We handed over our keys and that was that. She told us that we would receive a letter from the administrators and that would tell us what to do.
She advised us to contact Citizens Advice, because now we have to apply to the government for our redundancy and our wages that we have not had and it could take up to seven months.
GEMMA BISHOP, NOTTINGHAM
Gemma Bishop says staff had not been asked to work for nothing - they had been told to.
I am utterly annoyed at the way we all as Kwik Save employees have been treated, working for free and not even being asked to do so.
No wages this month without any warning - it's so wrong and so unfair.
We all have bills and direct debits to pay. Some of us have children and babies to feed and provide for.
It took me three years to find this employment and looks like I'm back to square one again.
I feel sorry for all my colleagues, I really do.
TREVOR CARTER, LEEDS
Trevor Carter is in a slightly different position - he sold greetings cards and accessories through four Kwik Save stores, with all his takings going through Kwik Save's tills.
At 0745, he received a call from one of the staff at the Torre Lane store, advising him to come and get his racks of cards out of the store while he had the chance.
I have not been paid by Kwik Save for several weeks, even though they have been taking my money.
Five minutes after I got there a lady arrived from the accounting department to pick up the keys and remove the week's takings.
She asked me how long I needed to clear out my merchandise.
I told her, "A couple of hours," and she said I could have 15 minutes because she had to go to another store in Hull.
The phone calls were not made by anyone with authority in Kwik Save, but by members of staff who did not want me to lose my goods.
Kwik Save have ruined my business that I started 35 years ago, apart from taking my money by selling my goods through their tills and keeping the money.
PAUL EDMINSON, HARTLEPOOL
Paul Edminson was a manager at the Kwik Save store in Hartlepool.
The treatment of staff and blatant lies told around our futures and wages has been unacceptable.
The unions did nothing but moan about our mistreatment when they should have called us out weeks ago.
How is it that an employee of a business can claim hundreds of thousands of pounds from a company for a sexist remark or a racist comment, but when this company causes you to risk your home or makes you unable to feed your children, it is deemed trivial by the courts?
[Chairman] Paul Niklas and [operations director] Steve McArdle should be held accountable, made to answer for their incompetence and not allowed back into business through any backdoor.
Shame on you both.