TESCO has decided to pull the plug on its plan to build a new superstore in Alton.

In a letter to East Hampshire MP Damian Hinds, Matt Davies, chief executive of Tesco UK & ROI, explained that “challenging” market conditions in the retail sector have prompted the company to consider its investments in the best interests of its customers. As a result, it had decided now is not the best time to go ahead with plans for the Mill Lane store.

Mr Davies, who has written in a similar vein to councillors and East Hampshire District Council (EHDC), said: “I am sorry that we have not been able to deliver the investment in the community as we intended.”

In a statement to the Herald, Mr Davies confirmed: “Following a detailed review we have taken the very difficult decision not to proceed with our planned Alton superstore.

“This decision was not taken lightly and we realise that some people locally will be disappointed.

“Our priority now will be to ensure the site is sold so that it can play a positive part in Alton’s future development.”

Dean Phillips, EHDC portfolio holder for Alton, said: “While this decision means the regrettable loss of some investment and employment in Alton we accept and understand Tesco’s decision. There is a lack of industrial land in the area and this development means that land is freed up for new opportunities which will tie in with the council’s ongoing work to promote economic growth in Alton.

“This marks another significant opportunity for a new business to move in or our successful existing businesses to relocate and expand.

“We are looking forward to carrying on our conversations with Tesco about the future of the site to ensure it is developed in a way that supports our strategic ambitions for the town.”