THE number of jobs in the UK convenience sector has fallen despite rising sales and investment from retailers.
Findings from the Association of Convenience Stores’ 2017 Local Shop Report, released today (6 September), reveal there are now just over 370,000 jobs in the UK convenience sector, down 20,000 on last year’s figure and 37,000 less than the 407,000 total for jobs in 2015.
The ACS has suggested the reduction in jobs has been caused by retailers adapting to cost increases in their business.
Headline findings in the report include a sales increase of £500m, bringing total convenience to £38bn, making the industry comparable in economic terms with defence, recruitment and oil and gas.
Revenues in convenience retailing have increased year on year since the first Local Shop Report in 2012, however this year’s 1.3% uptick in sales lags behind the CPI inflation figure of 2.6% released by the Office for National Statistics in July of this year.
While jobs are down and growth may lag behind inflation, convenience store retailers were found to have invested over £858m on store improvements in the last year.
The report also revealed that there are currently 49,918 convenience stores in the UK, 5,286 of which are in Scotland. This places Scotland second place in the number of stores per capita, at 1,022 people per store, with Wales top of the pile at 977 people per store.
And while the multiples may continue to pursue various acquisitions, the report revealed the vast majority of shops in the UK convenience sector are owned and operated by small business. Together, independent retailers were found to make up 74% of the convenience sector.
ACS chief executive James Lowman commented on the report: “Convenience stores provide flexible employment for over 370,000 people across the UK, but this number has fallen as a result of significant increases in the National Minimum Wage and National Living Wage, as well as other associated employment costs, alongside rising costs in other areas like business rates. In many cases, store owners are having to reduce the number of hours that their staff work whilst picking up extra hours themselves.
“Despite the pressure faced by retailers as a result of increasing costs in their business, the competition that convenience stores face has never been stronger. Convenience stores have to compete not just with other similar retailers, but also with food-to-go outlets, coffee shops, supermarkets and the growing presence of online grocery retail, which is why there remains significant investment in new technology and services within the sector.
“The intense competition and rising sales in the convenience sector demonstrates that local shops have never been more relevant to the lives of consumers, which is why a number of larger companies are now running convenience stores and moving into wholesaling or franchising in the convenience store sector. Technology and consumer needs are changing rapidly, so stores are constantly evolving to offer more products and services.”