TESCO confirmed in November that it would be opening a new Tesco Express store in Castletown in the New Year.
The new supermarket will be located in the Callow's Yard complex in the centre of the town.
Matthew Magee, corporate affairs manager for Tesco, said: "We're very proud to be part of the Callow's Yard development in Castletown.
"We're looking forward to bringing our great convenience offer to this exciting development which we hope will help to establish Castletown as one of the Island's best shopping areas.
"We're also very proud to be creating 20 new local jobs in this economic climate."
Shoprite responded to the news by saying shoppers in Castletown were already "well served with convenience stores".
Andrew Thomas, the chief executive of Shoprite, said Shoprite's strategy would be to "continue to focus on providing a differentiated offering rather than just replicating what already exists".
He said: "Shoppers in Castletown are already well served with convenience stores. Shoprite has therefore presented a viable solution for a broader food market store in Ballasalla in the Southern Area Plan.
"This is part of a wider business park development that will further address local requirements, complement the day to day convenience market in the nearby towns, provide handy and convenient parking, and allow servicing and access that will not cause disruption to Castletown's residents or affect the town's independent traders.
"Sustainable food shopping that adds economic value and reduces trips to Douglas was identified as essential for the south in the government's own Roger Tymm retail report in 2009 and our strategy will continue to focus on providing a differentiated offering rather than just replicating what already exists."
Castletown MHK Richard Ronan said the arrival of Tesco would be detrimental to all retailers in the town.
He said he had concerns about the wide range of goods and services that Tesco sells as well as concerns over traffic implications, deliveries, illegal parking and the environment.
In a statement Mr Ronan said: "My big concern with this particular retailer is that it will duplicate most of our existing businesses which may take the livelihood away from small, loyal businesses - some of which have supported the town for generations.
"I wish to state that I am not against Tesco but I feel Castletown is well served with the facilities it has and Castletown's future growth should be based on diverse, local, tax paying businesses."
The MHKS for Rushen were divided over the news of the new Tesco store. To see what they had to say click here.
This story is part of isleofman.com's Review of the Year 2011.
