It has bought adjoining properties in Princes St near the Oval and plans to establish a fruit, vegetable and meat retail outlet during the next 18 to 24 months.
The buildings bought by Hellaby for an undisclosed sum include the Southern Sports Bar and Grill and the adjacent Auto Court premises.
Hellaby chief executive Mike Barnett said when contacted yesterday redevelopment of the site might not be undertaken for 18 to 24 months, but he would like the premises opened by 2012.
"We are not a supermarket but more like an old-fashioned grocer with high quality butchery ... paddock-to-plate processing ourselves, direct to the retail floor," he said.
The 76-year-old family-owned company, which operates five Raeward Fresh outlets, including one in Dunedin, gained non-notified resource consent to operate as a fruit, vegetable and meat processor and retailer from the Dunedin City Council in December.
The operation is permitted to operate seven days a week, from 8.30am to 6pm, and employ up to 20 staff.
Mr Barnett said a "significant amount" would be spent on the redevelopment, including installing refrigeration, completing the fitting out and earthquake-proofing.
"We want to maximise what is a beautiful and unique building," he said.
The Southern Sports Bar and Grill may be demolished to make way for parking.
A spokesman for Auto Court said the company was in negotiations with two separate parties to move to premises nearby.
Hellaby would retain its existing operation in Kaikorai Valley Rd.
The scale of the retail proposal breached the council's district plan and was a non-complying activity, but planners said there were "numerous examples" of retail activities in that zone.
