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The Dunedin City Council said yesterday the planned consent hearing had been deferred at Countdown's request and no new date had been scheduled.
The decision to defer comes after council planner Amy Young recommended consent be declined, saying the proposed Gordon Rd supermarket would have significant adverse effects on a residential community.
Countdown issued a statement from general manager for property Adrian Walker yesterday, saying it still planned to go ahead with the supermarket, despite the setback.
''We're keen to invest and employ in Mosgiel and will continue to work with the council in the hope that we can achieve this.
''We've agreed with the council to defer the hearing date so that we can consider the issues they have raised in their report.
''We don't have a date yet, but we understand it will be in the next few weeks.''
Emma Peters, who has been employed as a consultant by resident group Positively Progressive Taieri, which is lobbying for changes to Countdown's plans, said it was not surprised at the recommendation for consent to be declined.
However, she could see the development going ahead if Countdown came back to the council and residents with more information about their concerns, particularly over what routes supply trucks would take in and out of the site.
''The group are not totally opposed to having a supermarket on the site,'' she said.
Mosgiel Business Association president Blair Arthur said he hoped the planner's recommendation would not result in Countdown ditching its plans.
Mosgiel's growth meant it needed a new supermarket.
''The more we can stop people driving over the hill, the more retail and the better it is going to be for Mosgiel [businesses],'' he said.