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Sainbury's is planning another bid to open a convenience store in Highbury months after residents and businesses thought the plan had been quashed.

The supermarket giant wants to open a Sainsbury’s Local in the former Highbury Vale police station in Blackstock Road – less than half a mile from an existing branch.

Islington Council granted planning permission to turn the police station into a gym, four commercial units and eight flats earlier this year but Sainsbury’s has now said the developer has scrapped plans for the gym, making way for its store.

The purpose-built police station closed in 2013 after 80 years. Traders presented a 2,500-strong petition against the proposal when it went before the council last year. Sainsbury’s said the new store would provide 20 to 25 “new job opportunities”.

But businesses this week warned again that a new Sainsbury’s could spell disaster for the area.

Muslum Yildirim, of nearby Highbury Wine, said: “It will kill off not just this business but the other shops – the coffee shop, the flower shop.

“Sainsbury’s sell everything and our businesses will die.”

Other supermarket chains in the immediate area include Londis and Tesco Express.

Rabiye Cinar, owner of Seasons and Blossoms, a fruit, vegetable and organic health food shop, said she was not overly concerned about Sainsbury’s hurting her store as it targets a higher-end market.

“Businesses around here are trying to make some success and pay their taxes and places like Sainsbury’s and Tesco just want to come along and grab it,” she said.

Ozgun Koral, who has two stores in Blackstock Road and has already faced competition from Sainsbury’s Finsbury Park store, said: “It doesn’t seem fair they can open so close to each other.” However, he welcomed the competition and even said the store could bring him new customers.

Caroline Russell, Green Party councillor for Highbury East, said: “The planned store would have a damaging impact on smaller shops and businesses. Local shops not only employ local people but they also use local service providers such as lawyers, accountants and banks.

“The proposed store is less than half a mile from an existing Sainsbury’s branch and it would simple suck the life out of our popular local high street.”

Former councillor for the area Terry Stacy, who was involved in the last campaign to stop Sainsbury’s, said: “This will be a test of the council’s resolve to stick to what residents wanted.”

Sainsbury’s plans to submit a planning application to the council shortly. Its regional acquisitions manager Kevin Brown said: “The developer’s decision to include a convenience store on the site provides us with a good opportunity. Blackstock Road is a vibrant and well-established high street and we hope to contribute to the vibrancy of the area.”