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Scarborough’s Nisa boss said he would ditch his North Bay shop if he wasn’t tied in by lease, amid fears profits will plummet as a result of summer excavation works.

Daniel Wilson, who operates five branches in the town, claims it came as a shock when he read Yorkshire Water was planning to tear up the road network and dig a trench on the beach at Peasholm Gap from June to October.

After struggling to make a profit since the convenience store opened at The Sands in 2009, the business chief now fears the work will be the final nail in the coffin for his business, and other units there.

Mr Wilson, director of Wilson Retail Ltd, said: “I read about it on the front page of The Scarborough News and I thought it can’t be true. It’s seasonal down there and the current work has already had a negative impact. We can live with that, despite there being a lot of drilling and loud noises, but digging the beach up in the height of summer is a different matter.”

Mr Wilson said the shop had failed to make a profit since it opened four years ago.

“We have only been able to sustain it thanks to our other shops. Summer is the only time we really make any money and we were hoping for a good one this year after the bad weather last season,” he said.

“If there was a way, I would just close the store because it’s not a shop we want to run - it’s expensive and there aren’t enough facilities to bring people down there consistently. But it’s not that easy as we are tied in with a lease.”

The work at Peasholm Gap is part of Yorkshire Water’s £50 million “Coast to Boast” scheme in the town, which needs to be completed by April 2014 to meet tough new European standards on bathing water quality

As part of the project, a 70m long and 3m wide trench will be dug on the beach in front of the slipway. The mini-roundabout in front of The Sands will also be dug up so a new sewage pipe can be installed.

Yorkshire Water’s community engagement officer Claire Glavina stressed that the North Bay is “by no means” closed this summer and said compensation talks were underway.

However, Mr Wilson remains sceptical. “You’re not going to take you’re kids down to the beach with that happening. It might be fenced off but it’s going to put many people off. I can’t really imagine any other places in Englan would allow them to dig up their beach in the middle of summer. It just seems stupid,” he said.

“All it takes is for one business to close at the complex and it would have a domino effect. Then there would be nothing down there apart from a big block of flats.”