Margins in convenience stores: A tough nut to crack

Margins in convenience stores: A tough nut to crack
As operating costs climb, market share shrinks, and margins being squeezed to the bone, convenience stores are in pressure like never before, finds Asian Trader. However, neither passing on the cost to customers nor slashing profits to be the cheapest store is a sustainable option, leaving retailers stuck between a rock and a hard place. 2025 is turning out to be a tough year for convenience channel. While each industry report indicates a slipping market share over the past few months, a storm of rises in costs from multiple fronts has extrapolated the woes of the sector. April’s tax hikes particularly are crushing convenience stores. National Insurance Contribution jumped from 13.8 per cent to 15 per cent, with thresholds slashed, costing the average c-store over £4,400 extra a year.
National Living Wage rose to £12.21, with under-21s seeing record increases. Business relief dropped from 75 per cent to 40 per cent, doubling the strain for many. Faced with these rising costs, obvious way forward is to either raise prices but at the risk losing customers or absorbing the cost and eroding already thin margins.