Yes, your competitor might oppose your trademark even if they do not hold the registration for identical goods or services. Even though this means that this business is not your direct competitor, the trademark law gives them legal grounds to oppose your application based on the likelihood of confusion between the two brands.
For example, let's say you sell T-shirts and hoodies under your brand name "ABC - sport". If a competitor filed for trademark registration of a similar or identical brand name before you and sells shoes, they can still oppose your application. Since shoes, T-shirts, and hoodies are categorized under Class 25, this can cause confusion because customers of the earlier trademark holder might assume that the brand simply expanded its range of products.