Developers behind a £42m regeneration scheme insist their plans will not change - despite supermarket giant Tesco pulling out.
The superstore was lined up as the anchor unit for the Fox Valley development of 25 shops, offices, a café and restaurant, as well as new housing in Stocksbridge.
But Tesco has confirmed it has scrapped its plans for the site - which would have employed around 250 people - as it pulls 49 planned developments and close 43 stores in money-saving measures.
Mark Dransfield, managing director of Barnsley based Dransfield Properties, said: “We are of course disappointed by this week’s news but it does not in any way alter our plans to build and deliver this important regeneration scheme in Stocksbridge.
“The withdrawal of Tesco allows us now to look at a more diverse retail mix for the area which we are very excited about.”
Work has begun on building shop units at the site the former Outokumpu steel factory off Manchester Road and a new warehouse for steel firm Tata has been completed.
The full project is expected to open by spring next year.
Dransfield Properties said Tesco had made a ‘significant’ financial investment which had been a great help but insist it was only one element of the scheme and bosses are confident there will not be a domino effect on other tenants.
Mr Dransfield added: “We have a good number of tenants already signed up to the scheme and a great deal of interest from other companies keen to be part of this new town centre.”
Tesco’s chief executive officer Dave Lewis said it was with a ‘heavy heart’ that planned stores, also including one in Worksop, would not go ahead.
He added: “I know this news will be a real disappointment. I am very aware of the importance of the sites and I am determined we will work closely with Sheffield and Bassetlaw councils to find the right solution for the local community.”
The stores that will close have not yet been confirmed.