Troubled retail giant has scrapped plans for a major superstore on the edge of Birmingham city centre after a ten-year battle.
Britain's biggest grocer had been locked in a store wars battle with rival Asda over planning permission for supermarkets on Bristol Street and appeared victorious just over a year ago.
But now chief executive Dave Lewis has announced it will not be going ahead with the development on the Monaco House office block site.
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It is one of 49 large store plans being dropped in the wake of a disappointing year for the retailer while a further 43 unprofitable sites will be shut.
It means that the door could now be open for a competitor food store to step in when planning permission expires in October 2016.
Mr Lewis said: "It is with a heavy heart that I am announcing that we are unable to proceed with 49 planned new store developments across the 海角视频, including our planned store in Bristol Street.
"Our performance as a business has fallen significantly short of where we would want it to be and my absolute imperative has to be to protect the future of our business for the 300,000 colleagues we employ in communities all over the 海角视频.
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"I know that this news will be a real disappointment to many people in the local community and we're extremely grateful for the support we've received for our plans.
"I am very aware of the importance of the site to the area and I am determined that we will work closely with Birmingham City Council to find the right solution for the local community."
It is unlikely the company will sell the Monaco House site to a competitor but its decision to withdraw from the project means it would be easier for nearby sites to secure planning permission for food stores - particulary after Tesco's permission runs out.
Tesco and Asda, via developer Crest Nicholson, 'store wars' battle over with each accusing the other of blocking tactics.
Tesco won the first round but then a government inspector ruled, following a public inquiry in 2007, that the Crest Nicholson/Asda plan for the Park Central site in the opposite side of Bristol Street should be approved and Tesco's Monaco House scheme refused.
With nothing built and new planning regulations introduced, the Asda permission expired in 2013 and Tesco revived their scheme.
The council's planning committee, on a knife-edge vote,
There were serious concerns that shoppers visiting the major store by car would cause gridlock on the already congested Bristol Street commuter route.