The retailer, Paul Smith, is claiming foul play after United Co-op refused to renew a lease on his Costcutter store in Pickering, North Yorkshire. United Co-op is seeking to open its own store on the site after the lease expires on January 2, 2007.
Paul is also unhappy that he stands to receive only about £9,000 as part of an offer of compensation which is linked to the rateable value of the property.
The dealings between the two parties has erupted into a bitter row after the Smiths launched a petition entitled "Hands off our store" which has received more than 2,600 signatures.
The Co-op has responded angrily to the accusation of improper conduct. A spokeswoman told C-Store that when the company informed the retailer of its plans for the store more than two years ago, it had made an offer £250,000.
"We have not acted as an irresponsible retailer," she claimed. "Our original offer was substantial. While it would not normally be our policy to release details like this, we thought it right to make it known in light of the unfair publicity we have received."
United Co-op general food manager Tim Hurrell is due to meet local councillor Natalie Warriner this week to discuss the matter. However, Paul Smith is not hopeful of a resolution and warned that the issue could yet end up in court.