Community-owned shops are in urgent need of a new support package to halt the sudden fall in the sector’s growth rate, campaigners say.

The number of community shops open and trading has fallen for the first time since records began, the Plunkett Foundation’s 2018 Better form of Business Report shows.

Only four new community-owned shops reached trading stage in 2017, the lowest number since 1999, while seven ceased trading, including two which transferred into private ownership, Plunkett said.

The total number of community shops trading at the close of 2017 was 346, a reduction of 0.6% since December 2016.

With 74% of community shops based in rented or leased premises, with short-term security of tenure, the lack of permanent premises was a key contributor to the declining growth rate, Plunkett said.

A perceived “lack of support from the community,” was another reason, James Alcock, Plunkett Foundation executive director said.

However, with 24 community shops in total having closed since 1992, the sector’s long-term survival rate of 94% still compared favourably with the estimation for all small UK businesses of 44.1%, Alcock added.

The research also found that despite strong interest from rural communities in establishing community shops, they are now taking much longer to reach trading stage.

This was mainly due to a shortage of funding opportunities towards start-up costs, other than what can be raised within the community, and the fact that unlike community pubs, community-owned shops lack a dedicated loan and grant programme.

In response to this the Plunkett Foundation said it was seeking to work with partners “to ensure that new and existing community shops have access to the support and help they need to reverse the trend of a slowing growth rate”.

It is also calling for funding specifically to help new community shop groups to take ownership of shop premises and to help existing shops expand and diversify their services.

During 2017 Plunkett received 50 new enquires from communities responding to the closure of privately run village shops.

There were 346 community shops open and trading across the UK at the end of 2017 and community shops generated a combined turnover of £53m and donated £112,500 to community projects across the UK.