Ikea has ditched plans to build a store near Chorley amid acute uncertainty on the British high street and while retailers are being hammered with soaring costs.
The Swedish flat pack furniture giant had planned to open a store on a site in Cuerden, near Preston, in 2020, creating 350 jobs.
However, the company has said the commitment is no longer viable.
Lancashire County Council has entered into talks to convince the retailer to move ahead with its plan, saying Ikea's decision was "disappointing".
Ikea had secured planning permission from the council to build the store, which would have been its second largest in the UK.
Geoff Driver, leader of Lancashire County Council, said: "This is extremely disappointing and we will hold discussions over the next few weeks with Ikea, the main anchor occupier for the retail element of strategic development site at Cuerden.
"We appreciate that there is a current state of uncertainty in the UK retail market generally and we know there have been rising costs. However, this still remains a great investment opportunity."
Ikea's decision comes after a string of retailers announced plans to shut stores, putting thousands of jobs in doubt.
This week, Mothercare said it was closing 50 stores as part of a Company Voluntary Agreement (CVA), affecting 800 jobs.
Other retailers opting for CVAs, a restructuring plan which involves closing stores and slashing rents, include New Look, House of Fraser and Carpetright.
Richard Rands, Ikea UK and Ireland property manager, said: "Our decision is due to increased development costs and delays outside of Ikea's control which no longer make this location viable.
"We will continue to look for new sites and opportunities in this region as part of our commitment to expansion in the UK."