MONTREAL — Denying it wants to bust the union, Wal-Mart announced Wednesday it will close a Quebec store whose employees were involved in negotiations to become the first ever to establish a union contract from the world's biggest retailer.

Wal-Mart Canada spokesman Andrew Pelletier said that anyone who assumes the decision was made as an attempt to bust the union "doesn't understand what went on over the past few months. "This store could easily have closed months ago and we didn't do that. We made a determination we were going to bargain in good faith."

The store, which will close in May, is located in Saguenay, about 250 kilometres north of Quebec City. Nearly 200 employees received union accreditation last summer, making it the chain's only unionized outlet at the time.

Pelletier said the company and the United Food & Commercial Workers Canada union had been trying since last October to reach a collective agreement that would allow the store to continue operating. Last week, the union asked Quebec labour officials to appoint a mediator, saying negotiations had reached an impasse.

"Last week, the union ended the collective-bargaining phase of the process and applied for first-contract arbitration," Pelletier said.

"In doing that, they basically acknowledged that the two sides were not going to reach an agreement. First-contract arbitration, within the context of Quebec, means a contract would ultimately be imposed on to the store."

Pelletier said the union's demands on scheduling and employee status would have required the hiring of at least 30 new people and resulted in extra work hours.

"Some of the union's demands failed to appreciate the fragile condition of the Jonquiere (Saguenay) store. The store is already well-staffed and has been struggling economically.

"It's a business decision, it's an economic-viability issue ultimately, but it's been exacerbated through added pressures."

The union representing the workers refused comment and said it would discuss the matter at a news conference Friday.

But Jean-Marc Crevier, a Quebec Federation of Labour spokesman in the region, called the announcement a "very big blow."

"I'm trying to think of what the employees are going through," Crevier said. "I've got goosebumps just thinking of it. It's sad."

Claudia Tremblay, a cashier at the store, said many employees burst into tears when managers told them about the news Wednesday morning.

"Many people cried, including myself," Tremblay, 29, said in an interview.

"I'm a mother of two children and I'm separated from my husband. It's very difficult."

Tremblay said she abstained from the unionization vote, adding she was upset that her non-committal stance won't save her job.

Employees at another Wal-Mart store in St-Hyacinthe, east of Montreal, have also been accredited recently.

Wal-Mart operates two other non-unionized stores in the Saguenay-Lac St-Jean region.

The union efforts at both stores are part of a larger chess game labour organizers are waging with Wal-Mart at stores across Canada. The campaign, financed by UFCW money from both Canada and the United States, is also geared to capture the attention of workers in Wal-Mart's home country.

The closest a U.S. union has ever come to winning a battle with Wal-Mart was in 2000, at a store in Jacksonville, Texas. In that store, 11 workers - all members of the store's meatpacking department - voted to join and be represented by the UFCW.

That effort failed when Wal-Mart eliminated the job of meatcutter companywide, and moved away from in-store meatcutting to stocking only pre-wrapped meat.

Recently, some workers in the tire department of a Wal-Mart store in Colorado have sought union representation, and the U.S. National Labor Relations Board has said it intends to schedule a vote.

Wal-Mart's world headquarters are based in Arkansas. Its Canadian division, whose head office is in Mississauga, Ont., operates 256 stores and six Sam's Clubs across Canada with more than 70,000 employees.