Sainsbury’s has pulled out of its controversial plans to build a new supermarket in a West Yorkshire town – sending “alarm bells” ringing over its plans to bring a store to Bingley.

The company and a joint applicant, Property Alliance Group, were due to fight a decision by planners rejecting their proposals to build a store on a derelict site in Todmorden, Calderdale.

The news follows an announcement last month that Sainsbury’s was slowing down the number of store openings across the country, despite a better-than-expected rise in profits.

The supermarket has now re-affirmed its commitment to building a 40,000 sq ft store at the former Bradford & Bingley headquarters in Main Street, Bingley, but has not yet given a starting date.

Howard Martin, chairman of Bingley Chamber of Trade, said: “The news that Sainsbury’s has pulled out of the Todmorden development sends alarm bells ringing. It is not clear whether this will be a bad or good thing for Bingley, but it obviously shows they are willing to pull out if needs be.”

Sainsbury’s did not reveal the precise reasons for withdrawing from the Todmorden scheme, which was unwanted by residents, a quarter of whom had signed a petition against the proposals. The supermarket group would only say it had pulled out for “confidential, commercial and contractual” reasons.

Mr Martin said Bingley residents and businesses were still supportive of Sainsbury’s proposals for Main Street, which have been given planning permission by Bradford Council.

Sue Smales, Sainsbury’s regional town planning manager, said: “We have an active new store and extension development programme in the North, but sadly the Todmorden scheme no long meets the company’s requirements.

“As we recently announced, work on the Bingley store will not start this year, but we do intend to begin some preparation works on-site.”