From hurdle to hustle: Convenience retailers outlook on 2025 [Exclusive]

As we step into 2025, the convenience retail sector is bracing for a year filled with both challenges and opportunities.

Rising operating costs, the end of a high-margin product line, and a wave of new legislative restrictions paint a demanding picture for this year. Yet, in true entrepreneurial spirit, convenience retailers not only stand firm but are also ready to innovate, expand and thrive.

Asian Trader got in touch with some of the leading convenience retailers to gauge the sector's mood. Despite the impending changes directly affecting the business, the mood in the sector is found to be upbeat and positive.

Plans for product line expansions, store refits, and strategic innovations are already set in motion, showcasing the resilience and creativity that define this industry.

For Londis Solo Convenience store owner Natalie Lightfoot, the mantra for 2025 is “work smarter, not harder”. Her 620-square-foot store thrives on its one-hour home delivery service, a unique offering amidst neighbouring supermarket competition.

“Over the last five years, I have been building up the delivery side of my business. I want to further increase my delivery sales share, which is at 40 per cent at the moment.

Retailer Natalie Lightfoot

"However, it's quite labour intensive. Considering the upcoming rise in wages, I will be streamlining this side more. That's going to be my top thing this year,” she says.

“I need to work smarter, not harder. I will also be focusing on improving tech in my store like getting headset for my staff.”

The Glasgow-based retailer is also planning to alter the layout of the store to adjust more freezers so as to increase the frozen food line.

In Dartford, retailer Nishi Patel is also planning to boost the delivery side of his business this year apart from building on his success in tracking trends through social media.

“We try to stay ahead of the curve when it comes to trends by keeping a keen eye on Tik Tok and Instagram. We will be adding more of Japanese sweets and drinks and American candies.

"We are also collaborating with a chocolate company in London to get some exclusive stock for Valentine's Day,” he tells Asian Trader.

Innovation isn't limited to products. In Hampshire, retailer Imtiyaz Mamode plans to upgrade his Wych Lane Premier Store with layout changes to accommodate new product lines, all while eyeing even a potential symbol group switch.

He said, “We have decided to change a bit of the layout of the shop so that we can stock more line of products. We will discontinue some non-performing ones and add some more potential ones.”

Popularly known as “TikTok retailer” for his knack for identifying viral trends, Mamode aims to introduce a cotton candy machine this year in his store, potentially a UK-first for convenience stores.

Elsewhere in Glasgow, for retailer Girish Jeeva, 2025 will be all about investing in his human resources and technology.

He shares with Asian Trader, “Our top priority for 2025 is to focus more on our team and benefits for them. We want to focus on developing their skills further and create a core team so we can remotely run our stores.

“We also have some amazing new innovations planned like anti-theft system and some more technology-based improvements.”

Retailer Imtiyaz Mamode

In south Of London, retailer Benedict Selvaratnam is aiming to expand the market presence of Freshfields Market, both locally in Croydon and through its brand-new e-commerce website.

The retailer is also planning to enhance customer experience by offering a “luxurious yet affordable” shopping atmosphere this year while introducing innovative packaging and operational processes for e-commerce.

Selvaratnam is also set to target Asian grocery segments this year to further diversify the store’s range, considering the growing consumer demand for ethnic and niche food products.

He is also seeing a greater emphasis on sustainability, including eco-friendly packaging and carbon footprint reduction as a rising trend in the convenience sector.

Meanwhile, retailer Priyesh Vekaria in Manchester, who has worked closely with the likes of Nestle, Phillip Morris, and Walkers in the past year, aims to focus on further strengthening relationships with suppliers to bring new product developments (NPDs) directly to the convenience sector.

“What I am hoping for this year is suppliers working more closely with us for the launch of NPDs directly to the convenience stores,” he says, adding that some of the big names are willing to work directly with convenience retailers.“

"Such events and activations work greatly in our favour as we can tap new customers. Earlier, brands only wanted to work with big supermarkets but now suppliers are acknowledging the reach and volumes of independent convenience sector as well,” he tells Asian Trader.

Retailer Priyesh Vekaria

Echoing the optimism of the wider sector, James Lowman, chief executive of ACS, states that suppliers are now more committed than ever to prioritising product launches and tailoring NPD to the convenience sector, so there’s a big opportunity there.

Lowman tells Asian Trader, “I think convenience stores acting as a bridge between online shopping and bricks and mortar through Post Office services, click and collect, parcel lockers and other similar services is something that can be a growth driver in the year ahead.

“Food-to-go has been long-identified as a big growth area for the sector and retailers should be looking to commit further in this area.”

Choppy waters

Despite the optimism, significant challenges loom on the sector. The upcoming disposable vape ban, rising wages, and National Insurance hikes are some of the main hurdles that retailers will have to navigate this year.

What is keeping most retailers restless in the impending disposable vape ban.

Lately, vapes not only has replaced lower-margin cigarette sales but they also come with higher margins for retailers. The transition to reusable devices, while inevitable, brings a sense of uncertainty.

Lightfoot informs, “A huge portion of our sales come from vapes and with the disposable vapes disappearing, it will be a huge issue for us. We have started stocking reusable ones but not all of them as I want to wait and watch how the market evolves after the ban.”

Jeeva also shares the same apprehension, saying “We need to see how much the ban is going to impact the business.”

To combat the impact, the Londis retailer Patel in Dartford has already started prepping up a bit.

“We have started getting liquid refillable devices in. With the ban inching closer, we are trying to get customers used to reusable ones. The response has been encouraging so far,” he says.

Retailer Vekaria is also concerned over Tobacco and Vapes Bill. He strongly believes that the policies, no matter how good they are, will prove inefficient if they are implemented without support on a grass root level.

Rising wage costs are another aspect bothering most of the store owners as some are even planning to cut down on staff and reduce working hours.

Vekaria says, “Increase in wages and National Insurance contribution are something that we will have to brace ourselves for. We will have to work out from where the additional revenue is going to come from. That’s the motto that we will be working towards this year.”

Retailer Nishi Patel

Echoing the wider sentiment, leading retailer Atul Sodha tells Asian Trader, “We are all very concerned how are we going to combat increasing costs this year. With National Insurance contributions going up to increase in minimum wages, we are getting squeezed from all sides.

“I think the key is to keep on top of the trends throughout the and what is happening in the market. Like for January, people usually become more health conscious. They are looking for healthier food and drinks and convenience stores should aim for such signs by offering healthier food like protein yoghurt.”

Apart from rising costs and compliances, retailer Selvaratnam also foresees navigating supply chain disruptions, especially for international imports, as another major challenge this year.

“We’re closely monitoring regulations around environmental compliance, such as waste management (vape laws) and packaging requirements, employment laws, particularly those affecting working hours and wages and food safety standards and labeling regulations, especially for products with an international origin,” the retailer tells Asian Trader.

To prepare, he is already investing in compliance tools, staff training, and adopting sustainable practices where possible, he adds.

ACS identifies business rate as another big challenge for 2025.

For anyone paying business rates, the discount will be going down from 75 per cent to 40 per cent in April which will have an impact, especially for urban retailers and those running petrol forecourts.

Lowman from ACS adds, “The smallest stores will be protected from the National Insurance increases by the increase in the Employment Allowance, but for anyone with more than seven or eight staff, or with multiple stores, the NI increases along with the National Living Wage hike will push up costs.

“And then if you’ve got more than 10 FTE employees, in March you’ll be included in the simpler recycling regulations that require stores to separate their waste into different bins before being presented to waste collectors.”

Retailer Benedict Selvaratnamwww.asiantrader.biz

Rising crime also continues to plague the sector, with retailers like Mamode expressing frustration over limited support from authorities.

“We are left to protect ourselves. We try to stop them and take back the stolen products; we do fight if need to,” he reveals.

ACS advices retailers to think about investing in equipment and systems to make themselves a “harder target” and to “report crime every time”.

“There will also be a lot of new advice coming in 2025, some has already been trailed like the disposable vaping guide, but we’ll also have advice on the simpler recycling rules and some exciting developments on accepting digital proof of age in store,” Lowman says.

Thriving Against the Odds

No matter how chaotic 2025 sounds like, the sector continues to remain focused on adaptation and growth.

Lowman from ACS tells Asian Trader, “The one constant that I see every year in the independent sector is that retailers always innovate their way to growth.

“I can’t go as far as to say for certain that conditions will be one way or another this time next year, but I do believe that customers will continue coming through the door and then it’s up to us to make the most of that opportunity.”

Hoping for some respite, Andrew Goodacre from British Independent Retailers Association (BIRA) is calling on the government to support independent retailers in 2025.

“We need the cost of running a shop reduced and consumer spending increased. To increase spending, we need to see a rise in consumer confidence – driven by falling inflation falling and reduced interest rates.

“Reducing costs is much easier – simply reverse the proposed increase in business rates until the reform of business rates has taken place,” adds Goodacre.

The road of 2025 may seem patchy at some points, but convenience retailers seem confident on their abilities and potential.

In the words of retailer Patel, independent retailers have always adjusted and adapted and will continue doing so in the coming months too.

As Lighfoot aptly puts it, “We are quite flexible as an industry. That’s like one of our greatest assets.”