Lidl in North Walsham wants to flatten its store and build another – more than half as big again – on the same site.

The successful German discount chain has put in a planning application to North Norfolk District Council for the demolition and rebuild of its Yarmouth Road store.

If approved, it would see the current 807 sq m net sales area increased by 479 sq m to 1,286, but there would be no extra product lines on sale.

A traders' chief said other businesses in the town would not be surprised at Lidl's plans but only time would tell whether it was good or bad news for the town centre. The store would be closed while demolition and building work were in progress. The new store would have 28 full and part-time staff – an increase of six – with the same number of 76 parking spaces.

Lidl has bought the neighbouring bungalow, at 11 Yarmouth Road, which would be demolished to make room for its expansion.

In December the firm was granted conditional permission to extend its store, using parts of the gardens of numbers two and three Farman Avenue.

The extension was needed to handle Lidl's in-store bread preparation but in its latest application it has decided it would be more efficient to demolish and rebuild so that the 'backnische' – the bread freezer, unpacking table and oven –could all be in the same area

Lidl is also negotiating with Norfolk County Council for a 10-year lease on part of the car park of the neighbouring New Road fire station.

Nicholas Lee, chairman of North Walsham Chamber for Business, said Lidl had been trading above capacity.

'The general feeling of most traders is that it's too small and too crowded. It's very, very busy for its size.

'We haven't met to discuss the plan yet and I'm not sure at this stage whether it will take any business away from other traders, or bring more in – it's swings and roundabouts. The good thing is that Lidl is in the town centre,' he added.

The store would look similar to the new one at Cromer.

But it may fall foul of district council planners again as it wants its new store to feature white walls with grey piers. When the council approved Lidl's extension application in December, it was on condition that it did not cover the current red bricks with a white finish as councillors felt that would be out of keeping with the nearby conservation area.

Lidl opened its North Walsham store in September 2002, on the site of the former Black Cat Garage. It is one of more than 600 in the UK and about 9,000 across Europe.

In December Lidl announced that it wanted to more than double the number of its UK outlets.