Aldi Katoomba has been granted their appeal for a liquor licence and renovations are well underway.

An ALDI Australia spokesperson said "ALDI Katoomba is undergoing a store extension with an additional aisle being added to the retail space. A lift is also being installed for customer convenience. The work is expected to be complete by the end of November."

It is third time lucky for the German supermarket chain after two previous attempts to gain a liquor licence were unsuccessful. Liquor and Gaming NSW granted the licence in June and made it public on Liquor and Gaming's noticeboard.

The company applied on October 11 last year and community submissions on the issue closed just over a month later. The Community Impact Statement revealed Katoomba Gospel Church and Katoomba Baptist Church in Waratah Street were opposed to the idea as there were enough outlets selling packaged liquor but police and council did not oppose it.

ALDI said they would ensure the licence did not impact on the local churches. There was a petition with 600 signatures received in support of their application.

In 2012 ALDI was refused an application on the grounds there were 49 licenced premises in Katoomba.

The Independent Liquor and Gaming Authority said Katoomba was a "hotspot for the occurrence of domestic violence related assault and non domestic violence related assault and malicious damage". Council at the time said there was an "alarming incidence of social problems associated with alcohol use".

In the recent application ALDI said the liquor outlet would take up a "small section of only 38 square metres" of the 971 square metre retail space, behind a closed screen.

"Liquor to be sold will principally comprise a limited range of the ALDI brand (including beers, wine and spirits). On occasion a small selection of non-ALDI products may be available ... for a limited time until sold out," the report said.

About 100 lines of liquor would be available "substantially less ... than a liquor store" and no refrigerated products would be sold. It said "neighbouring occupiers and stakeholders" were notified during the consultation period and a sign was placed on the window. Security measures would ensure minors would not gain access to the area.

The Independent Liquor and Gaming Authority (ILGA) said in making its decision on the licence for the store at 201-205 Katoomba Street, it "carefully considered all submissions and the licence has the following conditions: