The Lower Eyre Peninsula District Council Development Assessment Panel (DAP) gave approval at its December 21 meeting for the application by Coffin Bay residents Chris Darby and partner Annie Compton.

The complex will be located on the block housing the general store - next to another supermarket proposed by Cleve Foodland owner Greg Cook.

Mr Cook's proposal is set to receive provisional consent subject to a bonding agreement for infrastructure works associated with on-street car parking.

Mr Darby hopes to start building after Easter, finishing by Christmas, but is concerned two supermarkets in Coffin Bay could send one or both businesses under.

"It could be a detriment to the town if there's two businesses struggling and if one or both were to fail," he said.

"Especially seeing as it's right next door, it will be a conflict, but there's nothing we can do about that but hope we get enough community support."

Mr Cook, who hopes to have his supermarket open by early next year, said he shared Mr Darby's concerns.

"I think it would be hard for two similar businesses in Coffin Bay."

Both supermarkets have approached IGA to take on its banner, so Mr Darby said it would be "a bit of a race".

The Darbys plan to operate the supermarket themselves and lease out the stores.

The complex is to house five speciality shops including the butcher, liquor store, real estate agent and takeaway store, and a drive-through service station, with the businesses to relocate to the new building.

The council's development manager Leith Blacker said it was not the role of the council's DAP to consider a development's viability, but to assess the application against the Development Plan.

"The DAP assessed both applications against the relevant provisions of the Development Plan consolidated 17 May 2007, and found them both to be sufficiently in keeping with the majority of those provisions in order to warrant being granted a consent, or eventual consent in the case of Mr Cook's application," Mr Blacker said.