Convenience stores are scaling back on business investment as they brace for the impact of Chancellor George Osborne's National Living Wage..
How much convenience stores invested in improvements such as shelving, store signage and in-store lighting fell 34 per cent to £116m in the three months since the summer Budget, compared to the previous quarter.
The Association of Convenience Stores said that convenience store owners were being forced to make difficult decisions ahead of the upcoming National Living Wage.
"Convenience stores are still investing in their businesses, but this has fallen significantly over the last three months as retailers begin to make tough decisions about where to cut costs," James Lowman, chief executive of the Association of Convenience Stores, said.
"We know from our research that retailers cut staff hours in their business when wages go up, and we expect this impact to be even greater when the sector is faced with £167m of extra wage costs next year."
The National Living Wage means employees aged over 25 will be paid £7.20 an hour from next April, rising to 60 per cent of median earnings in 2020, estimated to be around £9 an hour. It's distinct from the Living Wage, which recommends businesses outside of London pay their employees £7.85 per hour.