Convenience retail continues to remain a robust sector despite rising crime and state intervention on unhealthy products, states leading property adviser Christie & Co today (16) in its annual report.
Christie & Co's report "Business Outlook 2025" reflects on key market activity, trends and challenges of 2024 and forecasts what 2025 might bring across the industries, including the convenience retail sector.
The report notes that in 2024 retail deal activity continued in the same strong vein as in H2 2023, and convenience retail remains a robust sector driven by need, providing solid investment opportunities. As such, Christie & Co's retail price index rose by 7.3 per cent.
Despite operational challenges from rising crime and state intervention on unhealthy products, there was a strong demand for opportunities.
According to Christie & Co 2024 data revealed in the report, there was a 20 per cent increase in the number of stores sold compared to 2023, with an average of ten viewings per sale.
Ever-increasing overheads will continue to present challenges for store owners and are causing the multiples to increase the turnover threshold for profitable stores.
Christie & Co notes that, as costs rise, continued divestment from corporate multiple retailers is expected and these divestments will inevitably present new opportunities for independent buyers in 2025.
The report also outlines Christie & Co's market predictions for the year ahead
Retailers will continue to face rising costs as a result of measures outlined in the Autumn Budget, and this will affect wages in particular.
This has the potential to cause inflation. However, as convenience stores are needs-driven, consumers will accept price rises or seek out value for money, states the report.
Retailers may be less inclined to hire more staff because of increasing wages and taxations, as announced in the Budget.
Due to increasing Government restrictions on unhealthy products, suppliers will have to adapt their offerings to fit requirements or sellers will have to evolve their product range, the report added.
It is unlikely that there will be a reduction in demand for sites, but purchasers will most likely factor cost increases into their offers while divestments from corporate multiple retailers are expected to continue as they continue to see costs go up and "tail end" stores may struggle, states the report.
Steve Rodell, Managing Director of Retail and Leisure at Christie & Co comments, “We are in the very fortunate position to be at the forefront of convenience retail business-to-business transactions, and we have worked very hard to become the market leaders.
"This is now a valuable position to be in, as other areas of retail, including much of the high street, struggle with internet shopping and multiple channels of competition.
"Convenience retail remains a needs-based sector, and as long as retailers listen to customers and satisfy local demand there is a good future for the convenience store.”
Click here to read the full report: https://www.christie.com/news-resources/business-outlook-2025/retail/
