Better Retailing reported earlier this year that rising costs were putting pressure on multiples to sell convenience store sites. Some of these sites earn £30,000 to £40,000 per year. In other words, there is a lot of profitable convenience store sites on the market.
Indeed, a recent business report by commercial property estate agent Christie & Co. revealed property sales across the convenience sector had risen annually by 20% in 2024.
Which is to say, at present there are signs the convenience store market is becoming a buyer’s one. There are an increasing number of people looking to sell a convenience store. A trend likely to be reinforced with increases to capital gains tax scheduled for April this year.
With all this in mind, it’s crucial retailers looking to sell their stores have a clear plan. Meanwhile, if you’re preparing your exit strategy now, with a plan to sell further down the line, it’s worth acting now to ensure you get the maximum value for your store.
How to increase value ahead of selling a convenience store
For some retailers, selling their store is part of a long term plan. It’s therefore worth thinking about investments you can make that will earn you more profit in the short term, and add value to your store when you sell it.
For instance, if there’s no local post office, adding one could increase the value of your store. Similarly, ensuring your store layout is up to date and effective can make it more attractive to potential buyers. The higher your store turnover is when you put it on the market, the better.
Valuation
As mentioned above, anyone buying a store is going to want a realistic overview of how well the business is doing. This means EPoS data and accounts. Ensure you have these up to date, well organised and easy to understand if you’re planning to sell a convenience store.
These will need to be long term. Many retailers suggest they should stretch back at least three years.
“At One Stop, we’re always on the look-out for quality stores to expand our ever-growing portfolio. The best bit? We make the process quick and simple for venders!
This year, we’re turning 50! Over the last five decades, we’ve built a reputation for operating quality convenience stores that become a focal point for the community.
“If you’re selling an existing business, a development site, or a vacant unit, we’d love to hear from you! We have a friendly team of experts, on-hand to answer any queries.”
Surveys
Meanwhile, Danny Wilson, who runs 19 One Stop stores across Yorkshire, suggested to Better Retailing an equation of a store’s turnover multiplied by 10 to get a valuation (so a store with £20k turnover would sell for £200,000). Adjustments of course need to be made to this. For instance, based on local property value and margins. Meanwhile, higher earning stores may also attract a premium, because they’re unusually profitable.
A commercial agent such as Christie & Co can help you achieve a realistic valuation. However, who you choose to partner with will impact your costs. “If you want to sell your store, it’s best to put it on the market with Christie, you will pay the premium but are more likely to sell and hit your price,” says Wilson.
Beyond the business performance, buyers will want to be reassured about the building itself. This could include everything from gas and electricity safety checks to structural surveys. If something comes up from a buyer’s survey it could halt or even end the selling process. What’s more, it could potentially cost you substantial amounts to get things repaired. This would be on top of any losses on what you’ve already spent selling the store, such as with accountants and solicitors.
With that in mind, it’s worth ensuring in advance that you’re up to date with regular surveys and safety checks. This could help avoid a nasty surprise.
Preparing to sell a convenience store – stock
Another question concerns stock in your store, which needs to be factored into the store’s value. Dead and expired stock should be removed as much as possible. However, it’s also important to have a clear idea of the value of the stock that will be sold with the business.
If your selling the store without any stock, and don’t have another store you can transfer it to, what will you do with any leftover stock ahead of the change of owners?
Preparing to sell a convenience store – staff
It’s worth your team members knowing in advance that you’re selling the business. It gives them time to prepare, and means they won’t be suspicious when viewings start.
Employees’ rights under the new owners should be protected at least initially under TUPE regulations, and with that in mind it’s worth directing your team members to these regulations so they know where they stand.
It’s also worth bearing in mind that staff wages will affect the value of your store, for instance if they’re over the National Living Wage. This is especially likely to a factor of close consideration with changes to National Insurance contributions and the National Living Wage.
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