Walsall Council’s planning committee threw out a proposal from the supermarket giant to take over the former Pelsall Villa Football Club ground and the adjoining historic Old Bush Inn off Walsall Road in Pelsall.
The company, along with joint applicant John Roberts said the pub had been damaged badly by fire and vandalism and would be demolished to make way for the new store with the 69 care apartments built on the football pitch behind.
But planning officers recommended refusal for the scheme for reasons including the impact on the highway and the harm to heritage assets.
Residents also told members at Thursday's meeting the new store would have a huge negative impact on existing businesses and the committee voted to refuse the application.
It was a mixed night for Aldi, which had earlier seen their plans for a new store in place of Ravens Court in Brownhills given the thumbs up. It said the customer base would have been different in Pelsall.
Representatives said they were disappointed with the decision and added they were confident they would succeed if they appealed.
Resident David Archer said: “All this will mean is little shops will fail. And to say people from Pelsall are an entirely different customer base, they are not. They travel to Brownhills and will continue to do so. So this argument we need to have stores in every little village and town in our vicinity with these discounters in is irrelevant.
“We’ve got to consider the infrastructure of the road which goes there. It’s very busy. There have been numerous accidents. I just cannot see how we can justify putting another Aldi in the village.”
Aldi’s Property Director, Robin Williams said: “We’re very disappointed following such a long period of consideration we are facing refusal, especially since at one point there were officers minded to approve.This application site is crying out for redevelopment. The football pitch is redundant and in poor condition.
“The former public house is damaged beyond repair due to vandalism and arson. Left undeveloped, this site will continue to deteriorate further. The proposed Aldi store and care home combined offers a comprehensive solution to site development. Contrary to officer view, there are substantial public benefits arising from this proposal which must be given due weight.
“It would generate a capital receipt by the Section 106 agreement of nearly £1million for the council to spend on football related facilities in Walsall.
“The foodstore will generate around 40 new jobs which equates to around £1 million of annual salaries for the town. Aldi offers unrivalled value for money, a very important consideration in a cost of living crisis.
“Officers accept the design, scale and massing of the development would not harm the conservation area. Overall, this is a substantial policy compliant development bringing substantial economic and social benefits.
“The reasons for refusal are poorly conceived and are all capable of being challenged. We are confident of our prospects of winning an appeal.”
There was a public house on the site at least since the 1800s.