THE grassy lots that border the Pacific Highway just north of South Grafton could be transformed into a bustling retail community after it was announced Bunnings Warehouse would relocate to the area by Christmas.

Last week Clarence Valley Council approved the home hardware retailer's development application to build a super store at Iolanthe Street.

Work has already begun on the 2.34 hectare site with Bunnings general manager of property, Matthew Toohey, naming Coffs Harbour builder Leigh Constructions as the winner of the lucrative building contract.

In a statement yesterday, Mr Toohey said the new store would be more than 9000 square metres in size and include a main warehouse area, timber trade area and outdoor nursery. He said the new development would represent a potential investment of $14 million in the local community.

All staff employed at the retailer's current store in Grafton will be transferred to the new location which is planned to open in time for the busy Christmas period. Approval for the project raises the prospect of the once flood-prone area becoming a major centre for retail in South Grafton with Hungry Jacks also said to be considering opening a store there.

Members of South Grafton's business community believed council's decision to green light the project was a positive sign for the area.

"It's good to see the confidence these large organisations have in Grafton generally, but particularly in South Grafton," South Grafton Emporium owner Annie Dodd said.

South Grafton Progress Association chairman Tony Wade believed council's decision would herald a new era for business in South Grafton, but acknowledged it would have some negative effects on smaller retailers.

"I think it could well be to the detriment of the smaller hardware store on the southside and that's a regrettable situation but it is progress and it will create a few more jobs not only in the construction phase but in the long term," he said.

"People wouldn't be moving there if they didn't think there was the business to support them.

"I believe South Grafton is becoming the hub I've always thought it could be.

"Come back in five years and you won't recognise South Grafton."

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