BOSSES have pulled the plug on plans to build a new multimillion-pound Tesco store on Wearside.
The huge retailer fought a two-year battle – at an estimated cost of hundred of thousands of pounds – to win planning permission for the store at Peel Retail Park in Washington.
It was given the green light earlier this year.
Its campaign defeated a rival bid by Morrisons and also overcame objections from the Galleries shopping centre, concerned at the competition threat.
But now Tesco has confirmed it has abandoned its proposals for the retail space, which is just off the A182 Sunderland Highway.
A spokesman for the chain said: “Having reviewed the scheme carefully in light of current customer shopping habits, we decided not to pursue this opportunity.
“Instead, we will continue to work hard to provide an excellent service to our customers from our existing stores in the area and through our online home delivery service.”
It was feared that the Tesco plan could scupper a £10million cinema and leisure complex development at the Galleries, also in Washington.
Galleries owner M&G Real Estate had threatened to scrap the proposals for the six-screen multiplex over concerns that a new store would lead to a drop in trade for its businesses.
Roger Wheeldon, senior development officer for Peel Holdings, owner of the proposed Tesco site and an agent for the retail chain, said he now plans to discuss options for the site with smaller retailers, such as Aldi and Lidl.
He said: “Tesco don’t wish to proceed.
“It is undergoing a lot of consolidation and shrinkage and, after bad results, the site is no longer part of its core strategy, which will focus more on the south of England.
“As a group, we are disappointed that delays in the planning system meant that by the time planning consent was given, Tesco company policy had changed.
“I think that the people of Washington have lost out.
“They are stuck with the same choice. Morrisons don’t now want a store either.”
Morrisons and M&G Real Estate did not comment on the situation.