Shop owners say they can't compete on a level playing field with the £10m store after bosses axed the controversial fees – allowing motorists to park for up to three hours.

Visitors are currently only allowed to park on the streets of the town centre for one hour at a time, something traders want to see increased.

John Sowden, who has owned Clarke's of Lytham on Market Square for 33 years, said: "Nobody knew about it happening.

"Everybody is going on about supermarket companies taking over the world and now it happening in Lytham.

"We are not trading on a level playing field."

John Strong, chairman of Lytham chamber of trade, fears the change will draw shoppers away from smaller shops. He said: "This can only take more people out of the town.

"The town has seen the impact of Booths already and this can only make it worse."

However, Philip Highley, who runs Highley's of Lytham greengrocers on Clifton Street, said: "People could just park on there and walk into the town. The car parks should be made cheaper."

Shoppers in the town have also signalled their support for more free parking.

Terry Dalton, 81, from North Promenade in Lytham, said: "Free parking should improve things for the town as a whole. But it could end-up having a detrimental impact on Booths."

Bert Rowland, 70, from Swinton, said: "It will depend how people feel about walking into town.

"You could end-up spending time walking in and not doing what you want."

Ice-cream seller Phil Kiernan, 55, of Lowther Terrace in Lytham, thinks the free on-street parking in the town centre should be extended past one hour.

He added: "An hour is far too short.

"By the time some of the elderly people get out of the vehicle and walk to a couple of shops they have to come back again."

Fylde Council, which will be monitoring the three hour parking limit at Booths, says there are no planning regulations to govern the running of a firm's car park.

David Benson, retail operations director for Booths, said: "In recent months there has been congestion in the area due to parking on the road which is something we want to discourage.

"We hope being able to park free in Lytham for three hours will draw more people to the area and encourage them to come and use the great services and shops the town has to offer."