1/17/2020 | Restaurants

Forecasts ongoing portfolio rationalisation and acquisition programmes for convenience market

Continued rationalisation of large portfolios, reinvestment and disposal of surplus assets remained key themes across the retail sector in 2019, presenting both corporate and independent operators with ample opportunity to grow their businesses. Shifts in consumer away from the high street and rising operating costs underly this transactional activity, according to the latest annual report by specialist business property adviser, Christie & Co.

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The report, ‘Business Outlook 2020: Focus on Business’ reflects on the themes, activity and challenges of the previous year and forecasts what 2020 might bring across the sectors in which Christie & Co operates, including Retail.

It is noted trading fundamentals remained strong for the convenience market, which continues to account for over a fifth of the overall grocery market. As Christie & Co continue to expand both their team and network, the volume of local convenience transactions in 2019 has increased by over 10%.

Comparatively, the report highlights the high street and selective retail parks faced further store closures and job losses due to changing consumer shopping habits. Non-food retailers continued to battle against insolvency in some cases with consumers increasingly opting to shop online.

Average prices remained economically positive throughout 2019 across most sectors in which Christie & Co specialises, with Retail seeing a 0.5% increase last year, against a 1.3% increase noted for the prior year. Amid a backdrop of Brexit uncertainty this seen as a real positive.

Looking to the year ahead, the report also outlines Christie & Co’s market predictions which are:

  • We expect to see a rise in convenience franchising as suppliers make attractive offers, inviting retailers to participate in premium brands, such a Co-operative Food
  • There will be continued rationalisation of large portfolios by the multiples, whilst ongoing acquisition programmes will drive better performance in their top stores – necessary to mitigate rising wages and other operating costs
  • Ongoing strong demand for petrol filling stations, with an increase in overseas investment in the UK fuel market

Steve Rodell, Managing Director – Retail at Christie & Co comments, “We started the year slowly with much political uncertainty possibly affecting investor confidence. That seems to have evaporated in the second half and we finished the year strongly, with many projects in the pipeline that we look forward to delivering in 2020.”