The 'Ticket to Ride' shuttle bus offered residents in Temora, Narrandera, Cootamundra and Gundagai a free shuttle service in what the Marketplace said was to "reward their loyal customers".

However, struggling business owners in the targeted towns expressed concern that the initiative was taking away potential customers.

The outcry prompted community leaders including Cootamundra-Gundagai mayor Abb McAlister and Temora mayor Rick Firman to intervene and call for the initiative to be scrapped.

Wagga Marketplace said in a statement that they never intended to put the surrounding communities at risk of losing profits.

"Our historical data shows that at Christmas time, customers come most frequently from these four towns," the statement read.

"It was not our intention to detract business from these neighbouring towns, but to reward the loyal customers who already make the trip to Wagga Wagga Marketplace for their Christmas shopping each year."

Cootamundra-Gundagai mayor Abb McAlister said he was 'disappointed' in the lack of unity in times of drought.

"Businesses are doing it tough, and our businesses have actually looked after our local people suffering through drought, yet now we have the marketplace wanting to take our shoppers away," he said.

Cr McAlister said he felt the offer was targeted at residents who were unable to drive themselves.

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"There are lots of shops there that are duplicated here, we still have clothes shops, shoe shops, grocery stores, the only thing they have that we don't would be a BigW," he said.

"Cootamundra does have a community bus anyway so those who can't drive can access shops here."

When asked how much money the service would detract from their local business, Cr McAlister said "You can't put a dollar value on this, it's just not on".

"We have to work together in this drought and what they've done is just trying to divide things, they're not thinking of regional communities," he said.

Temora mayor and business owner Rick Firman also expressed his concerns in a Facebook statement.

"Retail businesses in smaller communities, such as Temora Shire, are experiencing challenging times due to the impacts of the drought and this promotion only compounds the issue," the statement read.

"Council encourages residents to always support local businesses where possible and use tools, such as Facebook page Find it in Temora, to determine if a product or service can be purchased locally first."

The statement from Wagga Marketplace said "customers remain [their] number one focus".

"We had hoped to ease some of the financial burden associated with their Christmas shopping trip with free transport, meal vouchers and exclusive retail discounts," the statement read.

"We understand, however, that in doing so we have offended some local businesses and elected officials.

"We wish to extend our sincere apologies to these people and hope to continue a positive relationship in the future.

"We would also like to apologise to the customers who have already registered and may be disappointed with the cancellation of the event."