German discount retailer Aldi has submitted a planning application to Dublin City Council to build a supermarket at the former Rathmines Capital Hotel which it bought recently for a reported €10 million.

If the planning application is successful, the supermarket will be located in the former Savannah Cafe Bar and Club which closed recently. The 54-bed three-star hotel was purchased from brothers Liam and Des Dwyer of Capital Bars.

Aldi is looking to build a 1,349 sq m (14,520 sq ft) store on the Lower Rathmines Road site. It is expected to sell the hotel above to a developer.

This application is part of a massive €100 million expansion in Ireland by Aldi that will see its store numbers jump by 66 to 80 over the next 18 months. Aldi and its main discount rival, Lidl, have taken 5 per cent of the €6 billion Irish grocery market since they arrived five years ago. Aldi currently has about 25 applications pending decision with various planning authorities around the State.

Industry sources believe that Dublin City Council's decision on the Rathmines store may be affected by a lack of car-parking in the locality.

The former owners of the hotel, Capital Bars, also own the Grafton Capital Hotel and the Trinity Capital Hotel, and are planning to develop a hotel beside its Zanzibar superpub on Lower Ormond Quay.

O'Dwyer's pub on Lower Mount Street is being revamped and the company is close to opening a new restaurant and bar at the former Planet Hollywood outlet on St Stephen's Green.

Capital Bars also runs Cafe en Seine on Dawson Street, Zanzibar, Bobs Bar in Temple Bar, Sosume and The George on South Great George's Street.