Tax and inflation ‘outpace c-store investment and sales’
THE 2026 Local Shop Report from the Association of Convenience Stores (ACS) says taxes such as higher employer National Insurance contributions and business rates are holding back investment in the sector.
The report will be officially launched at the ACS Heart of the Community conference in Westminster on Wednesday 9 September, where retailers will campaign on the rising cost of trading at Parliament.
Investments made by convenience store retailers in their businesses reached record levels at more than £1billion in 2024, but have since dropped back to around £900million annually in 2025 and 2026.
The total sales for the convenience sector are forecast at £49.1billion in 2026, a 0.6% increase on the previous year. But inflation stood at 2.9% on average over the last 12 months, leaving retailers needing to find efficiencies and claw back margin on products and services to make ends meet, claims the ACS.
The report shows a continued increase in the number of stores featuring technology that reduces labour costs – there are now self-service tills in one in five convenience stores in the UK, with electronic shelf edge labels featuring in 14% of stores.
The ACS has warned the Government that convenience stores cannot continue to take the brunt of cost increases without consequences.
In its submission ahead of the Budget last week, the ACS set out the decisions already being taken by retailers, including reducing staff hours, owners covering more hours themselves, reduced or delayed investment and, in some cases, the sale of the business altogether.
ACS chief executive Ed Woodall said: “Local shops are incredibly resilient, but they can only absorb so much before difficult decisions have to be made. It is clear that tax increases and new regulations are impacting retailers’ ability to invest and grow, which could in turn make them less able to adapt and continue to deliver the services and support that communities rely on.
“Retailers are gathering in Parliament this week to send a clear message to the Prime Minister that the cost of trading needs to be addressed.
“Local shops have spent decades embedding themselves in their communities, supporting local people and providing hundreds of thousands of jobs. We’re not looking for handouts, what we need is some breathing space to be able invest, innovate and keep delivering for the communities we serve.”
