Traders in Arundel fear they will lose business if a developer is allowed to close off parking bays while new houses are built.
Shopkeepers in Tarrant Street, Arundel, are angry at plans to put hoardings across seven parking bays while three houses are built in the grounds of Carleton House, a listed building.
The hoardings could be in place for up to 15 months, which traders said was excessive and would exacerbate the town's parking problems.
Frank Angus, who runs Larkins general store opposite the site, protested.
He said: "It will dramatically affect our trade.
"What are visitors going to do? They will take one look at the lack of parking and the noise and mud from the development and won't bother stopping."
Louise Dunham, who runs Arun Fruiterers and Flowers, said traders were unhappy about the lack of consultation and said the hoardings were being put in the wrong place.
She said traders and the Arundel Society believed a section of raised pavement and an ancient wall should be taken down during the building work and replaced when it was finished.
She felt hoardings taking up part of the road would make it too narrow for 999 vehicles.
Neil Moore, of Guy Leonard and Partners, agents for developer Fulldean, said: "Inevitably there will be some disruption as it is in such sensitive area."
Arundel Town Council has organised a meeting on March 6 for traders and Tarrant Street residents to meet representatives of Fulldean.
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