Convenience stores hit with both rising costs and reduced spending could face a drop in jobs, investment and sales, according to the latest Association of Convenience Stores (ACS) Local Shop Report.
According to the 2025 edition of the report, there has been a slight increase in the number of convenience stores trading in the UK to 50,486, however the number of jobs that they provide has fallen from 445,000 to 443,000 and the amount invested by retailers has fallen by £100m from £1bn to £900m. It also found that projected sales this year has fallen to £48.8bn, from £49.4bn last year.
The ACS cited a range of pressures facing retailers including stretched household budgets on top of costs such as employment costs and changing legislation.
Retailers have seen that employment costs have risen over the last year as a result of the combination of National Living Wage increases and changes to Employer National Insurance rates and thresholds, meanwhile the Government reduced reliefs from 75% to 40% this year, with more cost increases on the horizon through the incoming business rates revaluation. The ACS believes these rising costs will mean retailers are out of pocket by an additional £612m this year.
The ACS also highlighted how retailers have also had to deal with the additional cost of vape recycling in their business, and most recently the impact on their sales from the introduction of a ban on disposable vapes. Later this year, retailers that are part of a larger overall business will be banned from providing multibuy promotions like buy-one-get-one-frees on High Fat, Salt and Sugar products.
ACS chief executive James Lowman warned of an “extremely challenging year for local shops”. “The cost of doing business has risen significantly while sales have stagnated due to fierce competition from discounters, supermarkets and other retailers”, said Lowman. “These figures should serve as a warning to Government that we cannot continue taking the brunt of additional costs and other burdens without the impact being felt by the communities that these essential stores serve.”
On a more positive note, 80% of convenience stores have been involved in community activity over the last year, and convenience stores are consistently ranked in the top three services that have a positive impact locally, alongside pharmacies and Post Offices.
“Despite the challenges, convenience stores are still right at the heart of communities, more relevant than ever to people’s daily lives, and making a positive difference not just through diversified products and services, but as job creators, investors and social hubs,” added Lowman. “Every community has different needs and our members’ greatest asset is being able to adapt their offer to meet those needs.”
No comments yet