Independent c-store retailers are increasingly optimistic about future sales despite cutting staff hours, according to new research.
The Association of Convenience Stores’ Investment Tracker has revealed that 47% of retailers expect their sales to increase over the coming year, with 15% expecting sales to fall, resulting in an index of +32. This represents the third consecutive quarter of growth.
Some 21% of retailers have reported increased sales compared with the same period last year, up from 14% in February. Over a third (34%) said their sales had fallen.
However, one in four (24%) have reduced staff hours over the past year, with just 8% reporting that they have increased staff hours. In addition, only 17% of stores are reporting that they plan to invest in their store over the coming year, falling from 20% in February 2016.
ACS chief executive James Lowman said: “The recovering sales performance and improving optimism of retailers are encouraging signs in what remains a challenging retail environment.
“However, store owners are still faced with the ongoing challenge of food price deflation, intense price competition and increased regulatory costs, all of which will have a detrimental impact on the profitability of their businesses.
“We warned that retailers would cut staff hours and delay investment plans to deal with the increased employment costs due to the introduction of the national living wage, and these figures suggest that this is already happening. Convenience stores are facing multiple wage hikes over the next year in addition to the costs associated with auto enrolment pensions, which will likely lead to store owners having to cut back even further.”