The manager of a household goods store in Sidmouth said an application to build seven homes in the centre of town was made to ‘future-proof’ the business.
Chris Parkyn, who runs Housewares in Fore Street, said he 'followed the necessary channels', despite the application being refused by district planners.
Mr Parkyn said: "We were doing it to future-proof the shop - we have the space and the opportunity to do something, as the high street is getting harder.
"We followed the necessary channels and it was turned down.
"It means we have got to find other ways of keeping ourselves afloat.
"We will keep giving that customer service that people expect from us. We are trying to fit in with modern times and trying to keep up with everybody."
The business has recently undergone a revamp, which Mr Parkyn said has been appreciated by customers.
The shop now has new flooring and tills, and stock has been moved around to make the shopping experience easier.
Mr Parkyn said: "The shop is third generation-run.
"With that comes fresh plans to make the business work in the hard times that are now."
A new access ramp has been installed at the shop to allow disabled customers to enjoy shopping independently.
"Customer feedback has been fantastic," Mr Parkyn said.
"We have invested in new shelving too. We have been told it is a more pleasant shopping experience."
The application for Housewares sought to demolish the rear section of the premises and build seven two-storey homes above.
District planners threw out the plans, citing concerns with potential flood risks, the design and scale of the potential build and an 'unacceptable' loss of privacy the development would impose.
The application's design and access statement said the current extension at 22 Fore Street is being used as retail space by the shop.
The plans sought to knock down the extension and erect a new shop area, with seven small townhouses above the shop space.
No car parking would have been provided for the tenants, as the development would be close to two public car parks.
An existing car park, for nine cars, within the existing curtilage would have remained unchanged.
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