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The specialist advisor for buying and selling businesses said the absence of any significant distress underlines this strength.
It said buyers for going concerns remain attracted to the solid, needs-driven trading fundamentals that convenience stores and petrol filling stations offer, and this has driven some of the highest levels of demand in many years.
This was highlighted in its sentiment survey, with over 50% of respondents intending to buy in 2024.
Whilst retailers came under pressure in 2023 from supply chain inflation, price-sensitive customers and rising store theft, all amid the cost-of-living crisis, many stores maintained good profitability. This fuelled buyer appetite, especially among existing retailers, investors and from a growing number of small multiple independents seeking expansion.
According to Christie & Co data revealed in the report, average offers have started to balance out against the peaks seen in 2021-2022 but the team still receives multiple offers per instruction and the long-term trend remains on an upwards trajectory. In addition, the aggregate value of offers was 31% higher and instruction viewings increased by 17% compared to 2022.
This underlines the ongoing popularity of the convenience sector as a good investment. Demand is strongest for mid- to high-turnover stores (sales of £25,000 per week or higher) and buyers are willing to pay premiums for high performing sites.
The report also outlines Christie & Co’s market predictions for the year ahead, which are:
- Demand will continue to outstrip supply as buyers are attracted to the strong, needs-driven trading fundamentals that convenience retail assets offer
- Many first-time buyers still looking to enter the sector
- Multi-site operators will remain acquisitive and are looking to expand existing portfolios – seeking better quality, higher turnover stores to combat inflationary pressures
- Increased activity at small multiple operator level – could include acquisitions or expansion
- Multiples will also be looking to continue targeted divestment programs – shed poor performing/weaker sites to the independent market
Steve Rodell, managing director of retail at Christie & Co, said: “Whilst it is clear to all that the economy faced a variety of challenges in 2023, the convenience sector was one to ‘weather the storm’.
“It remains a solid sector in which to invest, even though it faced increasing competition from major corporate entities. Buyers new to the industry need to take good advice on location and store format before jumping in, but when they get it right, the return on investment can be attractive.”
