I do wonder whether the same concerns were raised in Brockley when the Brockley market started, and indeed if that market has had any long term impact on the local businesses. Maybe previous experience can help identify how to mitigate some of the concerns.
For what it's worth, I like the market for all the reasons given above, but don't go every week, just when I need something to do with the toddler really - I only ever really buy vegetables. Same as I don't go to Dartmouth Road shops every week , just when I am there for something else (swimming, library). However, I live in HOP and DO use my local shops daily, including a large sausage roll from Hills & Parkes far too often for my waistband.
I do my best to support local shops but obviously it all needs to fit in with my life, my budget and my needs.