A Budgens retailer is on the verge of selling up after 20 years because of the impact of a new Sainsbury's and plans for a new Tesco on the business.

Speculation over the Budgens store in Sheringham has grown after details of a bid for the store by a non-grocery retail chain were leaked to staff. Owner Jinx Hundal, who has run the store since 2006, said talks were underway with a third party interested in buying the store who had informed staff prematurely.

Talks to sell the outlet began after the opening of a Sainsbury's Local nearby hit sales by 37%, Hundal said. Tesco's success in resolving a long-running battle with local planning officials over a new store on the outskirts of the town had also influenced his thinking.

"We had an offer from a non-grocery retailer but it is not true to say at this stage that we will definitely be closing," said Hundal. "In the meantime we will carry on trading and I am planning for the summer."

Wholesaler Musgrave, which owns the Budgens fascia, is conducting negotiations with the interested buyer on the store's behalf.

Musgrave insisted the launch nearby of a new store run by one of the ­major multiples need not spell disaster for Budgens retailers.

"We opened a store a month last year and we have several examples of our stores competing with and beating major multiple formats," said a Budgens spokeswoman.