The store in Holborn, London, has been the subject of a Channel 4 documentary and was endorsed by the Conservatives for its Big Society set-up, which sees staff work for discounts on their food shopping rather than salaries.
Independent retailer Ravider Garcha, who owns a Spend and Save in Broadway, Gloucestershire, said he was not convinced that it should be granted relief. "The People's Supermarket is great, but there are loads of c-stores which are heavily imbedded in their local communities and which operate on very slim margins, but they don't get any relief," he said.
However, Crouch End Budgens retailer Andrew Thornton did not agree. "There should be a discount, as there are for charities," he said.
Local government minister Bob Neil has urged Camden Council to reconsider its decision not to grant the business rate discount.
But Camden's Labour finance chief, councillor Theo Blackwell, said: "We can't just offer rate relief to a business because the Prime Minister visited it."