Before the economic downturn most retailers were concerned that the growth of the supermarkets would change the face of the typical British high street for ever. But these days, it seems the recession has done more to transform the retail landscape than Tesco or Sainsbury's ever could.

According to figures from the British Property Federation, the proportion of empty shops across England and Wales rose from 4.5% in 2008 to 12% in 2009. In particularly recession-ravaged areas such as Derby, nearly a quarter (22%) of shops stand vacant.

Pubs have also been badly hit. According to the British Beer and Pub Association nearly 40 pubs are closing every week, with the highest losses in the North West, North East and East Anglia.

However, while these closures spell bad news for local economies, they may offer opportunities to independent retailers who want to expand their reach. By buying sites such as ex-pubs and car showrooms c-store owners have the capacity to create jobs and build thriving businesses on sites that would otherwise have stood empty.

Tony Evans, director and head of retail at Christie & Co, maintains that over the next 18 months many of the big pub chains will be looking to mark down their debts by selling poorly performing outlets. Their location can make them ideal for conversion into c-stores.

Evans says: "These pubs, in locations such as the middle of housing estates, lend themselves for use as c-stores because they have a captive customer base."

In fact, the company has just sold the freehold of The Heathway public house in Birmingham to local retail operator Red Mango Developments, which plans to convert the property into a convenience store.

Some entrepreneurs are even choosing to keep the beer flowing while still making the most of new retail opportunities, according to business sales specialist RTA.

"Recently, I've seen four examples of sites where new owners keep the pubs going and then open a convenience store on the same premises," says marketing executive Mark Whiteside. "These tend to be in more rural areas where locals have less choice and limited access to c-stores."

When Aasif Rabbani and David Hook, owners of the GSAI group, set their hearts on opening a fourth store in their local area in 2009, the closure of a nearby pub provided just the opportunity.

"We already had three stores in York and were looking at using a different kind of property," says co-owner Aasif. "The Reindeer pub was right next to the university, and we'd been looking to move into that area for some time, so we thought 'let's experiment'."

One advantage Aasif saw in choosing to convert a pub is that under current planning legislation owners do not have to gain council consent to change the site's use from what's known as A4 (a drinking establishment) to A1 (a retail outlet). However, owners may still have to obtain other permissions.

"A pub won't always be in the right format for a c-store," says Evans, "and if you have to have work done on the building you'll need to go through the relevant building regulations approval."

Because the GSAI group applied for permission to modify the building very early on in the process, Aasif explains that he didn't have any problems getting approval from the council. And since the group had a hand in designing the new store, they were able to put some of the pub's original features to good use. For instance, store deliveries are now taken down on a lift to the cellar, to be kept where barrels of beer were once stored.

While Aasif's experiences were extremely positive, Evans advises that potential buyers should be aware of pitfalls that might be hidden deep in the paperwork.

"Sometimes there may be restrictions on what a site can be used for," he says. "For instance, pubs are sometimes sold with a restriction on licensed premises. This is to make sure another pub isn't opened on the same site but it can stop c-stores selling alcohol.

"It's important that independents should go into a sale with their eyes open, and get a solicitor to check every detail."

The pitfalls

With the benefit of hindsight, Dave Phillips wishes he had taken a closer look at the paperwork when he set about turning a local car showroom into Spar Griffithstown, Pontypool, Gwent, in 2007. The store is doing well now, but problems with planning permission meant that it took nearly two years before it could open for business.

After seeing the site for the first time, Dave and his business partners saw that it was a potential goldmine. "I realised it was a great opportunity," he says. "It appealed to me because it was a blank canvas on which we could put whatever we liked, wherever we liked. The store is by a busy road and because the showroom had a forecourt, it has lots of parking."

The problems began when Dave and the team set about making modifications. "By law I knew we didn't have to apply for change of use," he says. "Out of courtesy we went to the council and asked if we needed planning permission to make alterations to the building. The answer was a definite no."

But when they applied for an alcohol licence the authorities pointed out a clause stating that the building could only be used as a car showroom, and that he would have to obtain permission to change its use after all. He had to take his battle to the local council and address 13 separate objections to a c-store opening on the site.

"It cost us a fortune as the legal expense of fighting the decision escalated. But we carried on because we knew it was a sound business decision."

Eventually, after they met the council's objections and pledged money towards a local crossing, the store was able to open in September 2009. "It's doing as well as we'd hoped," he says, "but with hindsight we should have gone through the original planning application and found the one sentence that said we couldn't change the site's use."

Both Aasif and Dave say that their purchases have been sound investments but advise others who want to do something similar to get some proper research under their belts before they make a move.

"You can't just walk into something like this," says Aasif. "It's cost us more than £500,000, but the store has been busy from day one. We went from zero to £22,000 in a week. But it's still a large amount of money to lose if it all goes wrong."

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