Kmart has squashed rumours it is looking to re-establish in Whanganui.

There have been persistent rumours that the Australian-based discount department store chain was coming back to the city after its attempts to find a suitable site in New Plymouth failed.

Kmart opened in the Trafalgar Square mall in 1989, in what was then the chain's largest retail store in New Zealand, but pulled out some years ago. The store it vacated was taken over by The Warehouse.

A spokesperson for the group told the Chronicle that while Kmart was on the lookout for new locations, "at this time we are not opening a new store in Whanganui". "If this changes, we'll advise the community with a formal announcement," she said.

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Earlier this month Kmart announced its plans to open in New Plymouth were on hold indefinitely.

The home decor, furnishing and appliance chain said it was still looking for the right site - months after a proposal to build in the Waiwhakaiho Valley was approved. Problems with sharing car parks put an end to that plan.

In November 2014, Hamilton company Foster Develop Ltd lodged a resource application with the New Plymouth District Council to construct a 5359sq m building in the valley.

One of the conditions was that Foster provided legally binding documentation that car parks provided for an adjacent retail area could be shared "in perpetuity". When those conditions could not be met, the plan fell over.

Kmart has 180 stores across Australia and New Zealand.