In its report the cross-party Communities and Local Government Committee criticised proposals to replace it with a new 'impact test'.
Committee chair Dr Phyllis Starkey said that the removal of the need test potentially threatens town centres. Association of Convenience Stores (ACS) chief executive James Lowman backed the Committee's call for the retention of the test.
"We oppose the complete removal of the need test and instead recommend the inclusion of a reformed need test within the new impact assessment framework," he said.
The ACS has also called for better guidance from government for local authorities on which developments should be considered under a 'town centre first' objective.