Mosgiel could be left with only one supermarket if Progressive Enterprises fails to win resource consent to build a new Countdown on Gordon Rd.
The issue was discussed during Dunedin City Council hearing committee meetings held in Mosgiel last week.
Progressive Enterprises lawyer Amanda Dewer said Mosgiel's Countdown store was on land owned by rival supermarket giant Foodstuffs, owner of New World and Pak 'n Save, and would not gain a lease renewal when the present lease expired in 2018.
Ms Dewer said because no other suitable supermarket sites were available in the town, Progressive would have no option but to leave the town if consent was not granted for the Gordon Rd site.
It is proposed the supermarket would be situated on the former St Mary's School site.
The site is zoned residential, which means it cannot be used for a large-scale retail development without council consent.
Dunedin City Council planner Amy Young has recommended consent be declined, but said the proposal would be more acceptable if some changes were made.
Those changes included scrapping plans for the proposed car park's secondary entrance off Church St; designing a facade more aesthetically in keeping with a residential area; and placing the supermarket closer to Gordon Rd, with the car park largely out of sight behind it.
The opening hours, traffic and parking around the proposed supermarket were also discussed.
Countdown's proposed hours for the Mosgiel site are 8am-9pm. But a recent Dunedin City Council planning report said restricting opening hours from 9am-6pm would ease the supermarket's effects on surrounding residents.
Progressive Enterprises said that would be the most restrictive opening hours in the country, and countered the recommendation by showing the committee examples of new Countdown stores built in or alongside residential areas with opening hours ranging from 7am-9pm to 7am-10pm.
Dunedin City Council urban designer Peter Christos said a major concern with the proposed 174 parking spaces was ''the absolute sea of car parks'' that would front on to Gordon Rd.
While proposed landscaping could hide the car park for the first few years, it could end up looking ''shabby'' and could fail to hide the car park sufficiently if maintenance tapered off, he said.
The hearing committee conducted a site visit on Monday, and it was hoped Progressive would be able to reply to any requests for additional information by June 19.
A decision was expected to be released in early July.
