Lidl has put forward plans for a new store at the site of the Mercure Goldthorn Hotel which could create 40 job if approved.
The proposals, submitted to Wolverhampton Council, would see the hotel demolished along with the business centre and one home.
Now Councillor John Reynolds, who represents the area, has raised concerns over traffic, pollution and mature trees being cut.
He said: "I fully understand the concerns because they are concerned about the extra traffic pollution and noise.
"My concern is that they are looking to take 28 of 38 mature trees on the site and that's a big concern for local residents as is the impact on traffic.
"It will have a big impact on the local population as well as the noise and pollution."
Councillor Reynolds made the comments after being handed a petition, which was signed by more than 100 people, from resident Kiran Kular who objected to the plans.
Kiran said at the time: "We are concerned about rising traffic, parking problems and littering if this goes ahead. And the independent grocery stores on Lea Road are also very disappointed.
"The planned entrance is to be on Oaklands Road, and that means that homeowners there will have Lidl right on their doorstep.
"There are at least 28 mature trees which will be cut down too to make way for the store. Instead it would be nice to see the hotel converted into a leisure centre, as many people use the gym and pool there, more housing or even a restaurant.
"We have nothing against Lidl, but there is going to be a large Tesco opening where Waitrose was and the large Sainsbury's down the road. We just don't need another supermarket here right on our doorsteps."
A spokesman for Lidl said about the proposals: "We are delighted to have submitted plans to bring a new Lidl store to Wolverhampton.
"If granted, this would mark a multi-million pound investment in the area and the creation of around 40 new full and part time jobs for the local community when the store opens. We look forward to receiving a decision in due course."
The petition is currently awaiting decision.