Investment in convenience stores hit the £1bn mark in the preceding four quarters, marking a 55% increase year on year, according to the ACS Local Shop Report 2024, as self-funding by retailers grew as a proportion of investment.
Despite the significant uptick across the industry, the key areas of investment as a proportion of the £1bn remained largely stable. Refrigeration remained at 56% of total investment, while technology spending rose to 32% of spending, the joint largest proportional change seen, the report said.
According to the report, funding from symbol groups made up 20% of the £646m total investment in the convenience sector in the 12 months preceding last year’s report, which approximates to around £129m. This year, the report said that 12% of all store investment came from symbol groups, suggesting that symbol group investment fell by nearly £10m year to year to around £120m.
The value of sales in the convenience sector was up by more than £2bn year on year, rising from £47.1bn to £49.4bn. The ACS also calculated that the value of annual sales across the industry will equal £54.6bn by 2027. The significant uptick in investment in stores, however, did not translate into a material spike in the economic contribution of the sector, as General Value Added (GVA) and tax contributions grew only marginally.
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Crime drives retailers’ spending
Much of the increase in spending has gone towards security measures for shops, however. As shoplifting rates see significant increases, crime prevention measures made up nearly a quarter (23%) of the money retailers spent on their stores.
ACS communications director Chris Noice said: “Investment is up, but it’s not all fun and games. Retailers invested more than £1bn in their businesses for the first time this year, but a lot of that is in defensive investment – spending money on areas like crime prevention and detection, energy efficiency and other futureproofing and productivity measures that reduce the business’ exposure to cost increases.”
Nisa managing director Peter Batt added: “Despite the ongoing challenge of retail crime and the shocking far right riots, retailers continue to demonstrate their unwavering commitment to serving and enhancing their local areas, and I’m particularly proud of the way our Nisa retailers have persevered.”
Growth for online wholesale platforms
Amongst the biggest areas of growth seen in the report was a notable uptick in retailers’ use of online wholesaler platforms, with 51% of surveyed retailers having made use of them, compared to 31% only a year ago. Within this, while in 2023 25% of shops used online wholesaler platforms to order products for delivery, the report showed that 47% of stores were doing so in this year.
There were also increases in retailers using online wholesale platforms for click and collect and for comparing prices of products. Only 2% of shops reported using them to find out about new product lines, however, compared to 5% last year.
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