The decision on whether Aldi can open in Louth will be made this week.
A planning officer has recommended that the scheme to demolish the Malt Kiln at Newbridge Hill and build an Aldi on the site should be approved.
But an East Lindsey District Council planning committee is due to make the final decision on Thursday.
The council has received more than 100 letters in support of the plan.
However Morrisons supermarket has objected.
A letter to ELDC on behalf of Morrisons said: “The Retail and Economic Assessment...identifies that the impact of a new foodstore will have a 28 per cent impact on convenience goods shopping facilities in Louth town centre.
“Give the above, our client is therefore extremely concerned that the proposed Aldi store will not only have a detrimental impact on the Morrisons store, but a detrimental impact on the vitality and viability of Louth town centre as a whole.
“Given that the Morrisons store is located within Louth town centre, approximately 130m from the primary shopping area, and generates significant amounts of linked trips, it is paramount that it is protected in order to maintain the vitality and viability of the wider town centre.”
A planning offcer report to the council said: “The demolition of the Malt Kiln would be a major improvement in townscape terms for Louth. It would improve the outlook and residential amenities for those living around the site and so is a material consideration that attracts significant weight in the determination of this application.
“Despite being in an out of centre location the site is considered to be suitable for a discount supermarket due to it being sequentially acceptable, accessible, well connected to the town centre and unlikely to have a detrimental impact on the vitality and viability of Louth town centre.
“The design of the proposed store is attractive and the formal seating area and area of open space would be welcome additions to the area.
“Demolition and construction works would cause problems of noise, dust and disruption, however, these impacts would be temporary and relatively short term. These issues as well as those of contamination and asbestos could be satisfactorily dealt with by condition.”
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