The number of jobs in the convenience sector has fallen by 5% as rising costs continue to pile pressure on independent retailers.

According to the 2017 Local Shop Report from the ACS, there are 370,000 jobs in the convenience channel – down from 390,000 in 2016 and 407,000 two years ago.

ACS chief executive James Lowman highlighted “significant increases” in the national minimum and living wages, additional employment costs and business rates rises as the driver behind the loss of jobs.

“In many cases, store owners are having to reduce the number of hours that their staff work while picking up extra hours themselves,” he said, pointing to the report’s findings that 20% of independent convenience store owners work more than 70 hours a week.

Despite continuing cost increases, sales in the channel in year to March 2017 rose £500m to reach £38bn and are expected to hit £40bn by the end of this year.

The report found that retailers have invested more than £858m in the past year on improving their stores, extending their range of services and making their businesses more efficient.

The biggest area of investment was refrigeration, followed by in-store lighting and internal building maintenance.

“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,” added Lowman.

“Technology and consumer needs are changing rapidly, so stores are constantly evolving to offer more products and services.”

Read the full Local Shop Report.