Clothing stores, gift shops and other "boutique" retailers could be banned from a planned new suburban Napier shopping centre in a council bid to stop it sucking business away from the city's struggling CBD.

Napier City Council staff have recommended granting permission for a new retail development on the corner of Kennedy Rd and Georges Drive but are suggesting it be restricted to "convenience" businesses that won't compete with central city stores.

The decision is now in the hands of a council hearings committee, which met yesterday to consider the resource consent application.

Napier Deputy Mayor Faye White said the committee was still deliberating after the "lengthy" 6-hour hearing, and an outcome was expected "by the end of the week".

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Developer Matvin Group wants to build a six-store retail complex on the vacant corner site that used to be a petrol station.

As part of its consent application, the council asked the company to commission an "economic effects" report because council staff were concerned about the possible impact of the planned development on businesses in the nearby Marewa shopping centre and the city's CBD.

The report, by Adam Thompson of Urbecon, concluded the new development would have either no effect or a very limited impact on existing retailers, and it was not necessary to limit the types of retail businesses at the proposed site. However, council planners said in their report on the consent application, despite Mr Thompson's assessment "there remains concern that the proposed development could contribute to what appears to be a trend of declining retail occupancy rates within the CBD".

While it was not a recommendation in Mr Thompson's report, Matvin Group had offered to restrict the type of businesses at the site to "convenience" retailers - including food and beverage sellers, chemists, hair dressers, butchers, florists and dry cleaners - that were unlikely to be located in the CBD. That restriction has been included in a list of conditions council staff have recommended the hearings committee include in granting consent for the development.

The hearings committee considering the application is chaired by independent commissioner Kathie Furlong and also includes Ms White and fellow city councillor Mark Herbert.

Hawke's Bay Chamber of Commerce chief executive Wayne Walford said he agreed the planned shopping centre could detract from Marewa shopping centre and the CBD.

"We've got plenty of opportunities to put shops in other areas that would add more vitality to those areas, rather than creating a new one."

Napier Inner City Marketing manager Zoe Barnes also agreed with council's recommended conditions on the development.

"We already have quite a significant amount of untenanted spaces in Napier. Marewa shopping centre has pretty well covered a lot of those ['convenience' store] spaces. It would have to be something pretty special for people to go off the beaten path."

Napier menswear retailer Graham Bell, who has run a store in Napier's CBD for 38 years, said he didn't believe the city centre was in decline.

"It's like a roller coaster in the CBD - it rides a wave. Already we've seen new businesses emerge and existing businesses refurbishing. It's certainly not at all doom and gloom."

He said the location of the planned shopping centre would not be attractive to retailers, unless parking and access issues were addressed.

"I think you would find any retailer going in there would be very brave. It's a busy intersection and there isn't parking."

Meanwhile, Tennyson St's Degas Womens Clothing & Fashion Boutique owner Diana Bayly said: "I think it's better for shops to be in one area."