Convenience stores remain a robust investment opportunity, with the number of stores sold by Christie & Co up 20% compared to 2023, according to the specialist business property adviser’s annual Business Outlook report.
The report notes that in 2024 retail deal activity continued in the same strong vein as in H2 2023, and that Christie & Co’s retail price index rose by 7.3%. The average sale price of a convenience store increased 21% to £315,000.
The firm reported an average of 10 viewings per convenience store and a 47% increase in the number of convenience store exchanges between 2023 and 2024.
Managing Director – Retail & Leisure, Steve Rodell, claimed that the ever-increasing operator cost base was causing the multiples to increase the turnover threshold for profitable stores, inevitably presenting opportunities for independent buyers. “Over the last five years, our market-leading service in the corporate space has seen Christie & Co feeding the growth of several multiple independent retailers (‘Miniples’) who remain acquisitive,” he said.
Demand for petrol filling stations remained strong with buyers continually outnumbering sellers, and by Q3 2024 Christie & Co had sold more sites than in all of 2023. The group observed that many operators have made significant investments in their real estate to attract customers to the forecourt. Significant market changes included MFG’s acquisition of 337 Morrisons forecourts for £2.5bn and EG on the Move’s purchase of 34 ASDA sites for £228m.
The report also outlined Christie & Co’s convenience market predictions for the year ahead, which are:
- 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
- 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
- It is unlikely that there will be a reduction in demand for sites, but purchasers will most likely factor cost increases into their offers
- Divestments from corporate multiple retailers are expected to continue as they continue to see costs go up and ‘tail end’ stores may struggle
