Ambleside traders say a new Tesco may be the ‘last nail in the coffin’ for the town’s independent stores.

The supermarket heavyweight has announced plans to open an Express store in the central market place, with a separately-owned cafe on the second floor.

Bosses say the shop will create 20 jobs.

The firm already has permission for retail trading at the empty site, last owned by Gaynors Sports, and is seeking approval for a cash machine and signage.

Established Ambleside firms say the supermarket’s arrival would threaten livelihoods and lead to job losses in the town.

Spar store owner Cliff Newton said he would have to halve staff to cover losses when the supermarket moved in, and added: “We expect a 25 per cent drop in trade.

"This will be the last nail in the coffin for several struggling traders.

"There are several whose businesses are hanging by their finger tips.”

Mr Newton said a chain store would exacerbate a current trading slump, caused by the departure of 500 University of Cumbria students who left when the Ambleside campus was mothballed.

Henry Roberts Bookshop manager Roy Bladen, 36, said the new jobs were no consolation to local firms.

He added that the atmosphere of the town would be ‘ruined’ by the addition of chain stores.

Margaret Spence, owner of Ambleside grocery store Granny Smith, said a supermarket would be ‘devastating’ for the village.

“The site they are moving into could have been used as space for eight local stores.”

Nick Martin, 58, owner of Martin’s Hardware, questioned if employees would be recruited from the area and whether the cafe was needed in a town that already had more than a dozen.

Mark Shepherd, 42, owner of Claytons Butchers, said he worried about the consequences of a chain ‘undercutting’ prices.

“Times are hard enough as it is,” he said. “In six months we will have to see if we are still here or not – who knows.”

Tesco’s corporate affairs manager Doug Wilson said: “Where Tesco have opened Express stores previously, they have actually increased footfall in the area and helped attract more custom.”