TRADERS in a small shopping street in South Croydon fear a Tesco takeover of the historic Swan and Sugar-loaf pub will spell the end of their businesses.

The shopkeepers in Selsdon Road say the supermarket giant would drive custom away.

Rumours have been growing in the last few weeks that Tesco is planning to open one of its Express convenience stores on the ground floor of the pub in Brighton Road, which has been closed since March 2010.

The site is owned by the Whitgift Foundation whose clerk, Martin Corney, would not confirm suggestions that a deal was close.

But he did say: "Tesco is one of the interested parties but there are other people interested and it is nowhere near a done deal."

Squatters who moved into the pub in July last year have now gone and speculation that something was happening was heightened after scaffolding went up around the building in the last couple of weeks.

Mr Corney said work was being carried out to "tidy up" the outside of the building.

The former coaching inn is one of Croydon's most iconic buildings and English Heritage confirmed this week that it was carrying out an assessment of the premises to decide whether to recommend to the Government to officially list it.

Its investigation follows a local request for listing, although English Heritage would not reveal who was behind it.

Official listing could limit redevelopment possibilities and the investigation process could delay any negotiations about the pub's future.

The Selsdon Road shopkeepers are convinced that the rumours of an imminent arrival of Tesco are true.

Binta Jallow, who runs Pound Plus, said: "We have all heard that they are coming.

"I am in my second year here and it is really hard – sometimes I am taking only £29 or £30 a day."

She added: "Tesco already has an Express store in South End and has just opened one in George Street. They are like a cancer spreading through the place and businesses like mine just cannot compete."

Kalena Patel, co-owner of the South End post office, said: "If Tesco comes here it will ruin other businesses and shops will shut down.

"Surely they could do something better like open a gym which would bring people into the area and help shops here."

Jane Brooks, who has worked in Maurice Hyde florists for 15 years, said she did not think an Express store would directly hit their business but would damage many other smaller shops.

She said: "It is hard enough as it is."

A spokeswoman for Tesco said: "We are always on the lookout for possible new sites all over the country and are often in negotiations for suitable schemes for Express stores. However, these often never materialise.

"Until an agreement is reached, or an application is made, we would not comment on individual cases."