An Bord Pleanala has refused to give planning permission for a 250-job, £12 million "shopping club", which was to be run by Costco in west Dublin, on the grounds that it would be too big, and would undermine local traders.

Excepting an appeal on a point of law, the move effectively scuppers the plan by the US retail giant to open a large outlet in the Republic. RGDATA, the grocers' association, welcomed the decision.

An Bord Pleanala said yesterday it had considered "the significant scale of the retail element of the proposed development" and the effect this would have on existing shops.

"It is considered that the proposed development would have a significant adverse impact on established retail shopping outlets in the area. The proposed development would, therefore, be contrary to the proper planning and development of the area," the board said.

The company planned a 11,500 sq m facility, open only to members of its "shopping club".

Retailers as well as a large number of ordinary members of the public were to be invited to join. Members would pay a £20 annual fee and access the facility with an electronic swipe card. The project was valued at £12 million, creating 150 new jobs immediately and a total of 250 over time.

Around 35 per cent of the space would have been used to sell food, with the rest given to other consumer goods such as tyres, lawnmowers, computers and even eye-glasses. Costco intended stocking a far smaller range of items than an average supermarket, and keeping its profit margins low.

At the hearing, RGDATA objected to the proposal, arguing that the Fonthill Industrial Park, where the facility was to be built, was not authorised for use to retail goods to the public, and pointing to the 778-space car park planned by Costco.

RGDATA's director-general, Mr Michael Campbell, said he acknowledged his members' commercial interests in blocking the development, but said the group would not have objected if Costco had proposed a smaller facility in a designated shopping park.

In June, the Minister for the Environment, Mr Demspey, issued a directive barring all future retail outlets over 3,000 sq m. This, combined with the board's view on the "retail element" of the project, would appear to rule out Costco's applying for a similar facility elsewhere in the immediate future.