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Countdown is ''surprised and disappointed'' a Dunedin City Council planner has recommended resource consent for a $15 million Mosgiel supermarket be declined.
The recommendation comes on the basis the supermarket would have significant ''adverse affects'' on the community.
The plan for a new Countdown on Gordon Rd, which was predicted to add 48 jobs, prompted concern among Mosgiel residents.
There were nine submissions against the development, citing increased traffic, pedestrian safety, noise and insufficient on-site parking among residents' concerns, three submissions in support and six neutral.
Countdown general manager for property Adrian Walker said the decision came out of the blue after it had been in discussion with the council over its plans for ''a number of years''.
''We are surprised and disappointed by the council's decision.
''Nothing has been raised by the council team over the last few years which would indicate they were not supportive of the proposed new store, so we'll now need to look at how we move forward to talk through the issues they have raised.''
The company had worked hard to come up with a development which fitted the local community.
''As part of this we have been working constructively with local community group Positively Progressive Taieri to address the concerns they have, and we believed we were making good progress.''
Council planner Amy Young's opinion is one piece of evidence to be considered when the council's hearings committee convenes to hear submissions next week.
In the report, Ms Young said she did not agree with Countdown's argument the supermarket would maintain and enhance amenity values in what was a residential zone.
''I disagree with this statement and believe that the applicant has made no concessions in terms of designing a development that can integrate with, rather than dominate the residential environment.''
Ms Young also said Countdown's application lacked detail about two other retail sites, pedestrian safety and residential amenity.