The Association of Convenience Stores’ (ACS) 2026 Local Shop Report has revealed that taxes like Employer National Insurance Contributions and business rates are holding back investment in the convenience sector.
The report will be officially launched at ACS’ Heart of the Community conference in Westminster on Wednesday 9th September, where retailers will campaign on the rising cost of trading in parliament.
In its 2024 report, ACS showed that investments made by convenience store retailers in their businesses reached record levels at over £1bn, but this has since dropped back to around £900m annually in 2025 and 2026. This stagnation of investment has come as the Government removed hundreds of millions in rate reliefs and increased Employer National Insurance contributions over the last two years, stated ACS.
The total sales for the convenience sector are forecast at £49.1bn in 2026, a 0.6% increase on the previous year. Meanwhile, 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, said ACS.
The report showed a continued increase in the number of stores featuring technology that reduces labour costs – with one in five UK convenience stores now housing self-service tills and electronic shelf edge labels featuring in 14% of stores.
It also highlighted the growing importance of home delivery with almost half (47%) of retailers now offering the service, with the most popular method of delivery being a partnership with a service like Deliveroo or Uber Eats.
Convenience retailers’ commitment to helping their local areas shone through with more than three quarters of retailers (78%) stating that they were active in their community, collecting money for charities, sponsoring local sports teams, and getting involved with local litter picks and other initiatives.
The report revealed that convenience stores provide over 456,000 jobs across the UK, with 97% of colleagues employed on a permanent contract.
However, 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, 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.”
