Northgate's Leading Edge Video owners, Steve and Lynn Sunderland, announced they would close the business on October 31, with a massive sale of DVDs, Blu-rays, shelving and fridges until the shop shuts.

It will leave Civic Video as the last remaining video store in Tamworth.

Mr Sunderland, who has accepted a position as a health and safety adviser in the mining industry, opened Leading Edge in 2009, a time when there were five video shops in the city.

He said the growing popularity of illegal online downloads had continued to plague the industry.

"It went well for the first three years we were here but it's got to the point where you feel like you're putting up your hand to stop a tidal wave," Mr Sunderland said.

"The reality is, Australia is the biggest piracy download country in the world per capita. You can't download something to the same quality as a DVD or Blu-ray, but you can sit in your lounge chair and download a movie in five minutes for free. We just can't beat that convenience factor."

The looming arrival of an online streaming company in Australia and the growth of DVD vending machines were also putting the squeeze on the corner video store, he said.

"It's not a situation we wanted. We were the last one in Tamworth into the game but we won't be the last one out," Mr Sunderland said.

"The industry is shrinking to the point where it will soon morph into something else."

Having previously operated cafes in Tamworth, they would miss the many friends they'd made at the store.

"We're not leaving town. We're just leaving the business," Mr Sunderland said.

His wife will continue managing the Peel High School canteen.