The Association of Convenience Stores has warned that pessimistic consumers and increased costs for retailers are putting the UK’s 50,000 local shops under pressure, resulting in a fall in jobs, investment and sales.
The 2025 Local Shop Report, released today, reveals that despite a slight increase in the number of convenience stores trading in the UK to 50,486, the number of jobs that they provide has fallen from 445,000 to 443,000, the amount invested by retailers has fallen by £100m from £1bn to £900m, and the total projected sales this year has fallen to £48.8bn, from £49.4bn last year.
Convenience stores have faced major challenges over the last year, not just from a retail and grocery market competing ever more strongly against the backdrop of stretched household budgets and limited consumer spending, but from changes in regulation and policy that have added to their costs. Employment costs have risen significantly over the last year as a result of the combination of National Living Wage increases and changes to Employer National Insurance rates and thresholds.
The cost of business rates has also risen as the Government reduced reliefs from 75% to 40% this year, with more cost increases on the horizon through the incoming business rates revaluation.
The impact of Employer NICs rises, the National Living Wage increase and business rates increases alone will cost retailers an additional £612m this year.
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 said: “This has been an extremely challenging year for local shops as the cost of doing business has risen significantly while sales have stagnated due to fierce competition from discounters, supermarkets and other retailers. 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.”
While retailers have faced challenges this year, the sector remains robust in its commitment to serving the community. 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.
Lowman continued: “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. Every community has different needs and our members’ greatest asset is being able to adapt their offer to meet those needs.”
