Convenience stores are at risk of closing due to rising energy costs, unless the government steps in, the Association of Convenience Stores (ACS) told Radio 5 Live this morning.
“In terms of energy costs it’s looking really grim,” ACS chief executive James Lowman told host Rick Edwards. “Back at the beginning of the year, typically our members would be paying 15 pence per unit of electricity, something like that. They’re now being quoted, if they’re unfortunate enough to be renewing their contract, upwards of 60 pence a unit, so it’s more than quadrupling from the start of the year, that’s the sort of level we’re talking about.”
He claimed that the sector did not like to “cry wolf”, but that thousands of stores were facing crippling costs. “I don’t like to catastrophize, but the sums just don’t add up for many thousands of businesses in our membership, so something is going to have to be done to support them,” he said.
He claimed that c-stores were unable to adopt all the techniques a large business might be able to use to reduce costs. “You can’t hedge, you can’t buy ahead of time, you can’t do all those things to try and mitigate cost,” he told Edwards. “Ultimately, you’re in the market just like you or I would be as domestic customers and those costs are just not sustainable as a cost to the business. In the convenience store sector as a whole, the energy bill is £2.5bn now and that will continue to go up and it’s just not sustainable.”
He noted the strength of the sector, but claimed that store closures were inevitable without more support. “We’re a very resilient sector, very resilient during covid, very resilient during recessions generally, but if nothing is done about this particular issue there will be store closures and that will have a massive social impact,” he said.
He called for interventions on energy bills related to small businesses.“The most effective thing the government could do would be to introduce some sort of cap on energy costs because that is the driver of this acute emergency, which is facing our members and lots of other businesses,” he said.
Lowman added that additional support with business rates would also help. “During the pandemic up until right now there has been support on business rates,” he said. “At the moment our members are paying 50% of their normal business rates bills. That could be extended to 100% and could be extended further into the future. That mechanism for trying to support businesses has been shown to be successful.”
You can hear the full interview on BBC Sounds at 1:08