Earlier this year, the discount retailer lodged plans with Durham County Council to expand its store off Oxford Road by knocking through into the current Iceland supermarket.
The proposals would mean Iceland would close when its lease expires in September 2026, with Home Bargains then taking on the 1,705 square-metre amalgamated unit.
But the frozen food retailer argued it would “force” them out of the town after 14 years.
In a letter of objection Iceland said it has no desire to close, leave the area, or relocate – and its closure would have a “detrimental impact” on the town.
However TJ Morris Limited, which owns the site and Home Bargains, said its bid “better aligns with the retailer’s modern business model”.
Despite the objection council officials approved the plans in June, so long as the they take place in the next three years.
It is not currently known whether Iceland plans to relocate in the town as a result of the decision.
The Northern Echo has contacted Home Bargains and Iceland for comment.
‘Modest increase in floorspace’
The unit, opposite Aldi, is currently home to a Post Office and Morrisons Daily around the side, both of which remain unaffected by the proposals.
To merge the Home Bargains and Iceland space together, TJ Morris said it wants to knock down the internal wall of the building, which will also free up some extra space.
Planning documents detailed how the firm wants to create a “modest increase in floorspace” so that Home Bargains can “enhance its retail offer and improve choice to the benefit of shoppers”.
The merger of the units would see Home Bargains gain almost 1,000 square meters, going from 753 to 1,705.
While the internal works do not require planning permission, TJ Morris applied to the council to change the shopfront so the whole unit matches.
Under the plans, the existing Home Bargains entrance will remain and the current Iceland entrance will be removed and bricked up.