Irish retail giant Dunnes Stores has failed to gain planning permission for a €200m Dublin distribution centre, amid growing concerns the group will shelf plans for further expansion throughout the country.

Fingal County Council rejected proposals for the Donabate distribution centre, citing concerns over its environmental impact.

Dunnes Stores is able to appeal the council's decision, which was made earlier this month.

The firm had already been asked to amend its plans in relation to water service, heritage, landscaping, layout and transportation.

Planning permission was originally sought in October last year.

The proposals submitted detailed a 717,000 square foot building, around 600 car spaces and associated treatment plants in Donabate, County Dublin.

The project was estimated to cost €100m, doubling to €200m when logistics systems were installed.

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The eventual scheme was expected to fulfil the firm's aim of streamlining its distribution model.

Dunnes Store has declined to comments on Fingal County Council's decision. However, the council has revealed its reasons for refusing the plans.

Objections were raised over drainage, and concerns that "the proposed development, if permitted, would materially contravene development plan policies".

The project has already faced opposition from a local pressure group, the Donabate Community Council.

Amid planning struggles, it has been reported the retailer is considering scaling back expansion plans across Ireland.

It has been suggested these cut backs are a direct response to tougher trading conditions.

The retail industry, in particular the food sector, has become increasing competitive, as supermarkets continue to undercut one and other.

As a result, Dunnes has reportedly abandoned plans to open new stores in Drogheda, Saggart and Newtownmountkennedy.

Plans were afoot for Dunnes to anchor the €60m Mount Kennedy Town Centre in Newtownmountkennedy, which had been due to open in April.

Since then, locals offered positions in the new store have been told the jobs are no longer available.

Mark Felton, President of Greystone Chamber of Commerce, said: "It is deeply disappointing that the numerous new jobs that were to be created in Newtownmountkennedy will no longer be delivered."

The retailer has undertaken a massive expansion campaign during the last number of years, pushing its number of Irish store to 118.

TNS Worldpanel Ireland's latest figures showed Dunnes's 23.9% market share had only fallen slightly, by 2.1%, since the previous year.

(PR/JM)