Plans to turn a bakery at Hampton Lane, Blackfield, into two flats have been rejected for the second time.
Andrew Hill, of APE Properties Ltd, lodged an appeal after the original planning application was rejected by New Forest District Council in February this year.
But a government-appointed planning inspector has upheld the council's decision.
The inspector's report cites the importance of retaining active commercial sites that are used by the local community.
It adds: "As well as a lack of marketing evidence presented to me, I note a third-party representation which also indicates that the current use of the site is commercially sustainable.
"The appeal site is still within a cluster of local services and facilities.
"The residential use of surrounding buildings does not reduce the benefit of the existing use of the appeal premises for everyday community needs.
"I conclude that the proposal would result in the loss of a commercial premises, which would have a harmful effect on the provision of local services and facilities."
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