Tesco has dropped a planning application for a new store on the outskirts of Omagh.
The firm had been poised to act as the anchor tenant for the Opportunity Omagh development, a 37-acre site on Derry Road which has outline planning permission for business and leisure use.
It is not yet known if the supermarket will submit a revised application in the future, but a Tesco spokesman said the company was not pursuing the application "at this time, but will continue to consider opportunities to invest in Omagh".
It is understood that a planning consultant acting for Tesco told the Planning Service that a time limit on an agreement between the supermarket giant and the developer, Orana Group, had passed.
Owned by developer John Farmer, Orana Group is behind a proposal to build a Sainsbury's and other outlets at Crescent Link in Londonderry.
The Northern Ireland Independent Retail Trade Association (NIIRTA) said that Tesco's decision to withdraw plans for the Derry Road site will protect jobs and shops in Omagh.
Glyn Roberts, NIIRTA chief executive, has also questioned whether Tesco might locate at another site in the town owned by a Ballymena developer, which has been recommended for approval by planners.
Sam Morrison's Corbo, which owns a number of shopping complexes in Northern Ireland, is proposing a 7000sq metre shopping centre at Mountjoy Road, due to be discussed by Omagh Council's planning committee next month.
"It remains to be seen whether [Tesco] will now move to the town centre site which has now been successful in gaining planning permission in an application from Corbo," the NIIRTA chief executive said.
"In the light of this decision we would call upon Tesco to confirm if they are proceeding with a similar out of town hypermarket in Banbridge?
"Indeed, is this the start of a wider trend away from large out of town hypermarkets generally?
"The recent Lisney shop vacancy figures show the growing number of shop vacancies in every town and city in Northern Ireland and we would encourage all of the UK multiple supermarkets to play their role in locating stores in our town centres where they will contribute to the overall retail offer and boost footfall," added Mr Roberts.