Parking for a new structure is a classic externality. If the supermarket is allowed to be built and it doesn’t have adequate parking, where will the overflow go? To the surrounding neighborhoods. That means the rest of us who live near the supermarket pay the cost because we can no longer find parking in our own neighborhoods because people will park in the surrounding area instead.

If that happens, the supermarket builder has foisted part of the cost of running a supermarket (the cost of parking for patrons) onto the rest of us. That isn’t fair. In general the market works well at allocating goods and services. It does really poorly however at allocating resources that can’t easily be moved or substituted; especially in situations where the person making the decision (in this case, how much parking to provide) doesn’t naturally have to pay the cost of their decision (I.e overcrowding in surrounding areas).