Bunnings' plan for a new store in Capel has hit an obstacle. (ABC News: Madigan Landry )
Bunnings' plan for a new store in Capel, 10km from an existing store, has been refused by the WA Planning Commission.
Bunbury businesses argue the move would have undermined the city's status as a major regional centre and affected housing supply.
The WA Planning Commission said the application represented a significant departure from the local structure plan.
Planning authorities have rejected a fiercely contested multimillion-dollar Bunnings development 10km from its existing site in the West Australian regional city of Bunbury.
A public outcry erupted over the hardware giant's plans to vacate its site at a retail centre in Bunbury, south of Perth, and shift to the town centre of Dalyellup, 10 kilometres away in the neighbouring Shire of Capel.
Bunbury's business and political leaders united in a heated campaign against the new store, arguing it would undermine the viability of the regional centre, and take up land intended for housing.
Opponents to the plan say this vacant land would be better used for housing. (ABC News: Madigan Landry )
After considering the matter for more than four hours, the WA Planning Commission on Wednesday said the Dalyellup block had been identified for residential development and it was not satisfied a big-box retail development represented the "highest and best use" of the land.
Bunnings property and store development manager Garry James said he was disappointed by the decision.
"We will take some time to review the outcome and consider our next steps," he said.
Bunnings' current Bunbury landlord, Citygate, told WA planning officials the move would have cost local retailers in lost sales.
Bunnings representatives contested the claim, citing its own projections of a five per cent reduction in turnover for the Bunbury commercial precinct, which it said would be short-term, and affect only larger retailers.
The WA Planning Commission said the proposal was a clear departure from the existing structure plan, in which the land was identified for residential development.
More than 100 people turned out in Bunbury at a public meeting in June to oppose the plan. (ABC News: Georgia Loney)