Supermarket chain Tesco has lost its bid to build a store which critics said resembled a flat-pack development.
Government planning inspector Trevor Cookson described designs for the store in Rottingdean as "alien".
He dismissed an appeal against Brighton and Hove City Council's decision to refuse planning permission for the store in West Street, facing the main coast road.
The inspector's decision could have implications for all developments just outside conservation areas after he agreed the store's design was too ugly and not worthy of Rottingdean.
Mr Cookson said: "This small supermarket building does not respect its surroundings.
"It imposes an unashamedly, squat, prefabricated-looking standard Tesco Express type unit of the sort found in many petrol-filling station locations throughout the country on to this prominent, important urban site."
The inspector criticised Tesco for arguing, during a one-day planning inquiry at Hove Town Hall last month, that the proposed store fitted in with Thirties-style marine properties nearby.
Tesco said the single story building with its glass, aluminum and stone-clad frontage had been specially designed for Rottingdean.
Mr Cookson said this amounted to casuistry (clever but unsound reasoning).
He also criticised Tesco for emphasising the proposed store was much better than the run-down disused garage showrooms it was due to replace.
He said: "A replacement building must respect its surroundings by being of a good design. In this context the proposal is alien and obtrusive in both form and style. To me it is unacceptable."
The site is ten yards from the Rottingdean conservation area.
Tesco, which has hundreds of similarly-designed stores across the country, would not comment on the inspector's damning criticisms of the Rottingdean store's design.
A spokesman said: "We will study the inspector's decision and then decide our next move."
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