The Association of Convenience Stores (ACS) has warned that almost 7,000 convenience stores could be at risk of closure if the government doesn’t act on energy costs.
As a result, ACS is urging chancellor Jeremy Hunt to act in the Spring Budget tomorrow (15 March), to target further support of this.
Convenience stores that signed fixed contracts when wholesale prices were at their peak in the third and fourth quarters of 2022, are now most likely to be at risk of closure due to energy bills tripling for the duration of the fixed term contract, which typically lasts between 12 and 24 months.
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Average sized convenience store facing rates of up to 95p per kWh would need to pay over £75,000 per year for electricity in comparison to annual bills of around £20,000 in 2021.
Government support provided for 12 months at the current proposed level of 1.9p per kWh, will reduce an average store’s energy bill by around £1,520 for the year and equates to a total of £60m across the entire sector.
However, chief executive James Lowman said that the support taking effect from April is “a scattergun approach that has failed to target support for those who need it most, and this must be urgently addressed.”
ACS estimates that there are a total of 6,900 independently owned convenience stores that are currently stuck in excessive ficed contracts that threatens businesses and over 46,000 colleagues.
Lowman added: “We have repeatedly warned the Government that there are many convenience stores who simply cannot afford the increases that they are seeing in their energy costs and without additional support they may be forced to close their doors for good.”
Looking ahead, ACS has estimated that the government can afford to provide an additional £10,000 per store this year and can significanly reduce the amount of money that it would need to to support stores with, by requiring energy companies to allow businesses to end fixed contacts.