Talking Retail Grocery and product news for independent retailers
Christie & Co’s annual Business Outlook report – ‘Business Outlook 2021: Review. Realign. Recover’ – shows there was a large rise in convenience store footfall, particularly within local and independent stores as consumers stayed at or closer to home, and the result was a significant improvement to the operational performance of many businesses.
This attracted buyers to the market and influenced a dramatic increase in demand for convenience retail opportunities, with Christie & Co’s team observing a 19% increase in transactional activity in 2020, with buyer demand outstripping the supply of available stores all year.
The report suggests there will be a long term and sustainable bounce from Covid-19, which could see about a 10% rise in convenience sales across the sector compared with pre-Covid levels.
Christie & Co’s convenience retail price index for 2020 observed a 2.2% increase to average sale prices, reflecting a positive year, and deal times were reduced too.
The report also outlines Christie & Co’s market predictions for the year ahead, which include:
- Buyer demand will continue to outstrip supply across the majority of convenience and forecourt instructions, leading to competitive bidding.
- Sellers should therefore balance expectations with realistic asking prices knowing that the proper marketing will ultimately result in optimum pricing.
- We expect more disposals to come to market as corporates and multiples shed the tail end of their portfolios.
Steve Rodell, managing director of retail at Christie & Co, said: “I have worked across a few markets but I have to say, 2020 showed me that when the going gets tough the tough really get going. Whilst frontline emergency services have been immense you cannot ignore the way essential local convenience-based businesses have risen to the challenges they faced. They really are at the heart of our communities. I completely understand why buyers want to run a local convenience store right now.”
In addition, Christie & Co noted that the forecourt sector remained resilient in 2020 and, while fuel volumes significantly dropped during lockdowns, many businesses were able to adapt and bounce back swiftly once restrictions eased. All Christie & Co deals agreed and those progressing pre-lockdown subsequently completed and prices remained stable.
A trend that emerged in 2020, as highlighted in the report, was the increase in forecourt shop sales which improved the profitability of many businesses and helped them to offset reduced fuel volumes. This was driven largely by the shift in consumer behaviour in favour of local stores over larger chains following national lockdowns and restrictions on movement.
Christie & Co’s market predictions for the forecourt sector in 2021 are:
- Buyer demand will continue to outstrip supply across the majority of convenience and forecourt instructions, leading to competitive bidding.
- Sellers will need to balance expectations with realistic asking prices knowing that proper marketing will ultimately result in optimum pricing.
- More disposals will come to come to market as corporates and multiples shed the tail end of their portfolios.
