The performance of convenience stores during the Covid-19 pandemic has created a surge of new buyers interested in investing in the sector, according to Christie & Co’s head of retail, Steve Rodell.
The group’s Business Outlook 2021 report revealed a 19% increase in transactional activity in 2020, with buyer demand out-stripping the supply of available stores all year.
Rodell told Better Retailing the emphasis on shopping locally due to national lockdowns helped attract interest in stores that previously were struggling to sell.
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“There was an influx of new buyers who were looking at new opportunities in a sector that had been given a refresh because of how busy it was,” he said.
“Some of them used their government grant funding to purchase a store because they knew they’d get a quick return on investment.
“We were doing deals on properties people weren’t interested in before. It no longer seemed to matter if they had a Co-op or Tesco nearby.”
The report suggested the impact of Covid-19 on the sector could see a 10% rise in convenience sales compared with the previous year.
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Despite experiencing a raft of new buyers, Rodell highlighted those retailers with multiple stores also showed interest in expanding their portfolio.
“We have been dealing with buyers who have up to five stores already,” he said. “We have also seen a lot of interaction from retailers who have the backing of their wholesale partner, whether that be Spar, Nisa or Co-op.”
The report went on to reveal 45% of surveyed convenience retail operators indicated they were interested in selling, with 46% interested in buying businesses.
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Rodell acknowledged there was a “split” in performance between community stores and those located in city centres.
“Those stores in cities and near office spaces will definitely have suffered, but there will always be winners and losers,” he said.
“There will always be opportunistic buyers who know prices will be cheap in those areas right now and be aware of how quickly footfall will return once things normalise. There is a market for them, too.”
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However, despite the market seeing an increase in trading, Rodell warned stores against raising their prices.
“Sellers shouldn’t be rising their prices based on an exceptional trading performance,” he said.
“They need to be realistic about what the buyer will want to see. They will want to know how they performed before Covid-19.”
Find out more on our coronavirus information hub for retailers
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