More than 50 staff at the Rotorua Foodstuffs distribution centre may have to find new roles in the company or face redundancy following news the company is considering closing the site.

The proposed closure is part of a North Island reshuffle within the company, which includes the construction of office and distribution centres, based at The Landing Business Park, Auckland Airport.

It is proposed the Rotorua site, on Fairy Springs Rd, will close at the end of 2020 and those operations will be moved to the new distribution centre.

Foodsuffs chief executive Chris Quin made the announcement to more than 1000 New Zealand staff today.

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"In making the decision to build the new distribution centre, we have been looking at all the options possible to make the upper North Island operations as efficient as possible and fit for purpose over the next 30 years.

"We wanted to share our proposal to close the Rotorua distribution centre with our teams early in the project.

"If the proposal does go ahead, we feel it would be the right thing to do to give the team lots of notice and time to plan for the change."

Quin said if the proposal proceeded, the staff at the site would be supported to find alternative roles where possible or be "provided with the entitlements as set out in their employment agreements".

He said the Rotorua distribution centre would operate as normal for the next three years. In the meantime, it was business as usual, he said.

"Naturally there is some uncertainty as we work through the proposal, however our Rotorua distribution centre team has a great team spirit. They are total professionals in the supply chain business and are focusing on servicing our customers," he said.

"The team understands that we will be supporting them throughout the process and that we have their backs.

"We will work through the proposal with our team of 51 based in Rotorua ensuring that they are consulted, informed and supported throughout the process."

First Union Rotorua representative Phil Graham said he was waiting to see the full proposal but the "writing had been on the wall for three or four years".

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"The workers have felt it was coming, because of the loss of suppliers and staff leaving and not being replaced, changes of managers. They've always had concerns it would be closing at some stage," Graham said.

"We'll be working through it [the proposal] and seeing what we can secure for the workers, whether it be redundancy compensation or redeployment. All these options we'll be looking at."

Rotorua Lakes Council's economic growth portfolio lead and deputy mayor Dave Donaldson said the announcement was disappointing.

"Companies are always looking for efficiencies and Foodstuffs is no different but it is sad for Rotorua to have that number of jobs potentially lost.

"I'm not privvy to their reasoning or information but I am surprised they are moving to an area with acknowledged congestion issues."

Donaldson said he had no reason to think Foodstuffs' decision would have a roll-on effect with other companies.

"I haven't heard any rumblings from other companies. I don't know but I don't think this would set a precedent for other transportation companies to follow.

"There is still confidence in Rotorua's economy."

Donaldson did not know what would happen to the site if the centre was closed, but said it "created new opportunities".

"We have a shortage of commerical and industrial land so while I don't know what Foodstuffs plan to do with the site, it could create another opportunity."

Rotorua Chamber of Commerce chief executive Allison Lawton said if the proposal proceeded, the loss of 51 jobs and the associated costs would have a negative impact on the local economy.

"However there is a recognition companies need to continuously look at their business models," Lawton said.

"For Rotorua, as a city, we need to understand how the city can position better to ensure our value proposition as a vibrant commercial hub is relevant, provide appropriate long term incentives, and have a common vision and strategies to attract and retain businesses."

Rotorua mayor Steve Chadwick said it was fortunate there were other businesses entering the market, such as Kmart.

"We can't influence the business decision Foodstuffs has made but we are fortunate there are other businesses which are aligned to our district and its direction and are moving to Rotorua," Chadwick said.

"It's always disappointing when business decisions impact on individuals in our community and we hope staff will be taken care of and can be retained in Rotorua, rather than being redeployed elsewhere."

Rotorua MP Todd McClay said the proposal was concerning.

"It will be worrying for local people who are employed there. At this stage it's a proposal though it does have a sense of finality about it," McClay said.

He said Rotorua had been growing so losing such a large number of jobs was disappointing.

Foodstuffs brands include Pak'nSave, New World, Four Square, Liquorland, Gilmours, and the new Fresh Collective.