An announcement that Myer will not open a department store at the Westfield Woden shopping centre has sparked concerns for the centre's future.
The major retailer outlined in its recent full-year results to the Australian stock exchange that it would not proceed with a shop at Woden.
It comes after thousands of public servants were moved out of nearby government buildings or transferred to Canberra's central business district.
A number of prominent storefronts in the Woden centre remain boarded up after the closure of several shops complaining of tough retail conditions.
Former Edelweiss Gourmet Deli owner Dusanka Simic told 666 ABC Canberra she sold up earlier this year after operating at Woden for 10 years.
"Mainly it was the high rent, [taking] about 26 per cent of my annual turnover," she said.
"Financially there was no customers and the majority of people who live in this area are elderly or young couples, so hardly any families are here and it (retail trade) slowed down."
Ms Simic said she would have stayed on at Westfield if the management had been more flexible with the rent and outgoings.
"The rent is too high, and even for existing retailers here it is very, very hard," she said.
The president of Woden Valley Community Council, Jenny Stewart, said the rundown ACTION bus interchange and neglected town centre were also keeping people away.
She said the ACT Government had instead been focused on light rail and the CBD.
"We've been arguing for years that Woden town centre has been neglected in a planning sense," Dr Stewart said.
"Had there been better planning and more vision about the future of the area we wouldn't be seeing these problems to the same extent."
Woden bus interchange upgrade could be in doubt
Dr Stewart warned the ACT Government's decision to link the bus interchange upgrade with the proposed Westfield expansion was unwise.
"Now that Myer has said it is pulling out we are wondering whether the retail expansion will in fact proceed," she said.
"And if it does not, it means that the redevelopment of the bus exchange would presumably be put on hold as well."
She acknowledged there had been some residential development around the town centre, but employment and planning issues had been ignored.
Dr Stewart said the Woden Master Plan dating from 2004 urgently needed to be revised.
Canberra retail facing tough times: Business Council
Canberra Business Council chief executive Chris Faulks said a number of factors had affected retail in Woden.
"You've got 18 months of uncertainty about public service job cuts, coinciding with the competition from online trade and there's also a bit of changed spending habits after the global financial crisis," she said.
"And I think anyone who has been down to Tuggeranong has seen the same sort of difficulties particularly in the shopping areas."
She said town centres such as Woden rely heavily on the location of large government agencies.
"Obviously if you had something like the Health Department move out of Woden that would be catastrophic for the retail trade there," she said.
"So we are working quite hard to make sure the Federal Government recognises its responsibilities to the whole structure of retail in Canberra."
The ABC approached Westfield Woden for comment.