Perth’s expansion plans have been dealt a hammer blow with the announcement that supermarket giant Sainsbury’s has pulled the plug on a £41m investment on the former Perth Mart site.
The news was confirmed on Wednesday and will have serious ramifications on development of the vacant land and raises questions over roads infrastructure in west Perth.
The local authority has made road upgrades on the A9/A85 junction a cornerstone of future development in the area.
The announcement is also a jobs blow for Perth as Sainsbury’s had stated around 450 posts would have been created.
A major factor in the decision was Sainsbury’s recent court case with rival Tesco, which centred on the latter appealing against Perth and Kinross Council’s decision to allow Sainsbury’s to begin work on the former site of the Perth Mart in Crieff Road prior to vital roadworks taking place on the A9/A85 junction.
A spokesman for Sainsbury’s confirmed it had “terminated” its contract to develop the supermarket.
“Our contract was coming to an end and we had to make a decision to either extend it still further or to bring it to a conclusion,” he said.
“Faced with a project that has faced significant problems and delays, from the Tesco judicial review to establishing a proper sewerage and drainage system for the site, the only viable business decision open to us is to terminate the contract.”
Planning permission for the store had been granted in May 2012.
Perth and Kinross Council would not be drawn on theimplications of the Sainsbury’s decision on roads infrastructure.
A council spokesman said: “Until the final design for the road is costed we won’t be in a position to assess the impact of the Sainsbury’s decision.”
Despite Sainsbury’s withdrawing its interest in the Crieff Road site, the company said it is still “committed to Perth”.
Its spokesman said: “Sainsbury’s has worked very hard over the last few yearsto develop a supermarket on this site andit is regrettable that the various issues we have faced have made this decisioninevitable.
“This is no reflection on the community of Perth or our partners, including thecouncil and government agencies, with whom we have worked in getting this far.
“We remain committed to the city. We have a local trading very successfully on the High Street and if an appropriate opportunity came along to develop asupermarket in the area then we would be very interested in doing so.”
Council leader Ian Miller said thedecision was “disappointing”.
“I am aware that council officers andthe developers have worked together overa number of years, along with otheragencies and in consultation with the localcommunity, to progress this development as far as possible,” he added.
“I do take comfort that they pay tribute to the Perth community.While this is a loss to the city in terms of jobs that the new supermarket would have brought, I believe it has proved the potential of the mart site. It hopefully won’t be long before another potential investor for the site comes forward.”