The event, which had been due to take place on Sunday September 16, usually attracts around 70 stalls - but at the time of going to press, only around half that number had agreed to participate.
Gary Denniss, chairman of Louth Independent Traders which organises the event every year, told the Leader that the decision was ‘not taken lightly’, but that the low interest from stall-holders had left them with no choice.
Mr Denniss said: “Rather than wait until the last minute and then announce it has been cancelled, we decided to let people know now.
“It was a tough decision, and we are extremely disappointed to cancel the event.
“It has never happened before. Apparently other events around the country are having similar problems, but we have no idea why.”
Mr Denniss said the Louth Independent Traders’ next event - the Louth Christmas Market on Sunday December 2 - will still be going ahead.
Visit www.louthindependenttraders.org.uk for more information about upcoming events.