No one was injured in the blaze, which occurred just after midnight, and destroyed the Servay Supermarket in Bandar Kim Fung Batu 4 .
Forty-five firemen, who rushed there in four trucks and six utility vehicles, managed to control the fire from spreading to 15 shophouses in the same block.
Sandakan Fire and Rescue Station chief Jemishin Ujin said the station was alerted to the fire at 12.08 am and brought it under control by 3.38 am.
"The firemen were hampered by locked grilles," he told reporters at the scene.
Jemishin said the cause of the fire and the damage suffered had yet to be determined.
Sandakan Police chief ACP Rowell Marong, who was also at the scene, said an investigation would be carried out if the forensics division suspected arson.
He said a security guard spotted the fire at the back of the building after he heard the alarm go off.
The supermarket is the first branch of the Servay Kim Fung Supermarket, which had been operating for 16 years, and it employs 300 people.