Scotmid has tabled revised plans with the City of Edinburgh Council to knock down its store to make way for a new supermarket and 121 students flats.
Campaigners, led by independent Cllr Ashley Graczyk, rallied outside the store to highlight local objections.
Cllr Graczyk said: “All of the residents I have spoken to in my ward oppose this enormous, intrusive development. It is completely out of keeping with the surrounding tenement housing, significantly reduces daylight and sunlight to a number of properties and invades the privacy of tens of back greens.
“In the case of two blocks, neighbours are facing having a brick wall built in front of their windows.”
Residents accused Scotmid of “dirty tricks” last week after the Evening News revealed that managers and staff from other stores have written to planners in support of the proposals.
Locals also want Gorgie-Dalry Community Council to withdraw a letter of support for development and highlighted the loss of wildlife as another concern.
Resident Graeme Smith claimed that wildlife had been removed from behind tenement homes on Smithfield Street.
He said: “Scotmid sent workers to cut down trees in our gardens and remove a beautiful wall of ivy, disturbing nesting birds.
“It is obvious they have absolutely no concern for the community we live in.”
Scotmid said no trees or ivy had been removed from residents’ properties.
The campaign is being backed by Common Weal Edinburgh South West, which describes itself as a “think and do tank” that campaigns for social and economic equality.
Co-organiser, Katriona Gillespie, said: “This is our community and we want the voice of local residents to be heard.”
An initial application was refused due to the impact on neighbouring properties after attracting 52 objections and no support. The revised plans have received 89 objections and 27 letters of support so far.
Scotmid head of property, Maurissa Fergusson, said: “We take our responsibility to the local areas we operate in extremely seriously. We have been in conversation with residents, Gorgie Community Council and Edinburgh Council about these plans for many months and would encourage anyone with further concerns to get in touch so that we can address them proactively.”