SEAGULLS Club in Tweed Heads West is battling for survival with a plan that has other businesses in the areas seeing red.

The club has a development application with Tweed Shire Council to build a $2.75 million general store covering about 1900m2.

In a report attached to the application, it was stated that the development was necessary to ensure the survival of the club.

The projected loss for the club in 2012 was about $1.7million.

"These increasing losses and a shrinking revenue base means that the operation of the Seagulls Club is not financially viable," the report stated.

"In the absence of an increase in revenue and a return to profitability it is unlikely that the club will continue to operate in the short term."

Seagulls general manager Stuart Burrows said that IGA would lease and manage the general store.

A Tweed Head West business owner said the development would spell the end of established businesses in the area.

Panorama Shopping Village general store owner Dallas McGreachan started his petition on November 25 and has collected more than 1000 signatures against the Seagulls' development.

Mr McGreachan said the developers told him about the development about three weeks ago.

"Things have been bad and this development will decimate us.

"They said it wouldn't affect us but this development is huge," Mr McGreachan said.

He said support from the public was "outstanding."