The 2026 Local Shop Report, released today (7 September) by the Association of Convenience Stores (ACS), has revealed taxes like employer National Insurance (NI) contributions and business rates are holding back investment in the convenience sector.
Investments made by convenience retailers reached record levels - at over £1bn - in 2024, but have since dropped back to around £900m annually in 2025 and 2026.
This stagnation of investment has come after the Government removed hundreds of millions in rate reliefs and increased employer NI contributions over the last two years.
The total sales for the convenience sector are forecast at £49.1bn in 2026, a 0.6% increase on the previous year.
Meanwhile, inflation stood at 2.9% on average over the last 12 months, leaving retailers needing to find efficiencies and claw back margin on products and services to make ends meet.
The new report also shows a continued increase in the number of stores featuring technology that reduces labour costs – there are now self-service tills in one in five convenience stores in the UK, with electronic shelf edge labels featuring in 14% of them.
The ACS has repeatedly warned the Government that convenience stores cannot continue to take the brunt of cost increases without consequences.
Taking action
In its submission ahead of October’s Budget made last week, the ACS set out the decisions already being taken by retailers, including reducing staff hours, owners covering more hours themselves, reduced or delayed investment and, in some cases, the sale of the business altogether.
ACS chief executive, Ed Woodall, said: “Local shops are incredibly resilient, but they can only absorb so much before difficult decisions have to be made. It’s clear that tax increases and new regulations are impacting retailers’ ability to invest and grow, which could in turn make them less able to adapt and continue to deliver the services and support that communities rely on.
“Retailers are gathering in Parliament this week to send a clear message to the Prime Minister that the cost of trading needs to be addressed. Local shops have spent decades embedding themselves in their communities, supporting local people and providing hundreds of thousands of jobs.
“We’re not looking for handouts, what we need is some breathing space to be able invest, innovate and keep delivering for the communities we serve.”
Additional findings from the 2026 Local Shop Report include:
- Convenience stores provide over 456,000 jobs across the UK, with 97% of colleagues employed on a permanent contract.
- Almost half of retailers (47%) now offer some form of home delivery service, with the most popular method of delivery being a partnership with a service like Deliveroo or Uber Eats.
- For the first time this year, a third of retailers owning and running stores are under 30.
More than three quarters of retailers (78%) are active in their community, collecting money for charities, sponsoring local sports teams, and getting involved with local litter picks and other initiatives.
Parliamentary launch
The ACS will be officially launching the Local Shop Report 2026 at its annual Heart of the Community conference in Westminster on Wednesday (9 September), where it will be taking retailers to parliament to campaign on the rising cost of trading. Convenience Store will be in attendance and will report back for readers.
The full 2026 Local Shop Report is available to view here.
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