Six jobs will be lost when an upmarket interiors shop shuts in December.
Raspberry Village, in St Mark Street, is closing after seven years in the city.
Bosses say the business can no longer afford its rent and rates.
Donald Clark, sales manager at Raspberry Village, said: "The business in Lincoln is just not sustainable.
"It is with much sadness that we have decided to close our store after seven years of trading. Lincoln has become a very hard city to trade in.
"I believe rents and rates are too high for the potential business and catchment area.
"We are, of course, in a long haul recession and premium feel good home purchases such as those offered at Raspberry Village are the first to be hurt.
"When we opened in Lincoln there were great plans to open out this part of the city, with a new walk-through and high end residential accommodation.
"However, the plans came to a grinding halt and other changes made in the city have had real effects, such as letting high street stores move to retail parks.
"There is also the saturation of student accommodation.
"Parking in Lincoln is expensive and it's difficult to find spaces, especially at weekends, which is our peak trading time.
"I feel the planners have made some bad decisions and have a lot to answer for in Lincoln."
The closure comes almost two years after Venture Photography, the shop next to Raspberry Village, also called it a day.
Now, John Whitty, manager at Bathstore, in St Mark Street, says he is concerned by the lack of retail activity around his store.
"I have been thinking for a while that we may have to relocate, perhaps to somewhere like the High Street," he said.
"We have had people come in here who have lived in Lincoln for years and they say they never knew we existed.
"There is just no customer flow on this road.
"The vast majority of people are really young, studying at the University of Lincoln and with all respect, are not going to be buying the bathrooms."
Paul Seddon, development control manager at City of Lincoln Council, added: "Lincoln is a vibrant city that possesses everything a business needs to succeed.
"It is disappointing that we are losing one of the city centre's larger stores but we wish Raspberry Village every future success with their Nottingham store.
"There are currently very few vacant shops in Lincoln and I would expect this trend to continue."