Budget food store chain Lidl has drawn up fresh plans to open in Upper Norwood after seeing unpopular proposals for a new store rejected earlier this year.
The German retail giant is preparing to submit a new planning application to open the shop in Beulah Hill, at Crown Point, at the site of a former car dealership.
Croydon Council's planning committee turned down proposals for the shop, which 502 people signed a petition opposing, in February.
Critics feared the store would damage local businesses, worsen traffic congestion and put motorists and schoolchildren at risk.
But Lidl believes amended blueprints for the development, which would include six two-bedroom flats above the shop and a car park, will win approval thanks to an altered design that will "improve its relationship with the streetscene and its impact on the conservation area".
The original plans received 33 supporting representations and 14 formal objections on top of the petition.
All three Upper Norwood councillors objected to the plans, which were rejected unanimously by the committee on the grounds they failed the preserve the appearance of the Norwood Grove Conservation Area.
Alkesh Patel, manager of Crown Point Food and Wine, said Lidl opening would "kill off" neighbouring shops.
He said: "The area just does not need it. We took a bashing when Tesco opened next to us, now Lidl would kill off all our trade. It is not acceptable."
Coun John Wentworth said he would continue to oppose the store because the new plans did not address concerns about traffic.
He said: "Our position was not against the Lidl itself. It is an extremely busy junction and lots of residents have real concerns that it would cause traffic chaos."