Christie Finance welcomes the CMA's report into retail banking services
As specialists in the retail and forecourt sectors, we have been interested to observe the Competition and Markets Authority’s (CMA) provisional recommendations to encourage competition among retail banks, improve transparency in finance offers and make it easier for businesses to compare and switch finance providers. This has rightly been welcomed by the Association of Convenience Stores (ACS), as an improvement in access to finance will no doubt have a positive impact on the sector as a whole. It is also a benefit to operators to have support from outside the sector driving change in their favour.
As the ACS has recently disclosed, banks fund just 7% of retailer investments. Interestingly 68% of retailer investments are funded by private reserves. If these operators who are funding acquisitions and expansion through their own private reserves had funding support from a bank (or another specialist lender), would they be able to drive growth in a more strategic fashion? Would they also subsequently improve their buying power and improve margin? This could result in greater profits for operators and encourage further growth in these key sectors, which we know are vitally important to the economy.
Branded retail units, supported by the likes of Nisa and Premier, continue to show positive signs of growth. Consumer spending habits continue to change and evolve with an ever-greater need for convenience retail. As of 2015, the Local Shop Report (complied by the ACS) showed we now have 51,524 convenience stores across the UK, employing more than 407,000 and contributing £5bn to the UK economy.
In our experience, ‘generic’ bankers can struggle to really understand the retail and forecourt sectors, which can lead to difficulties when trying to arrange finance for an acquisition, refinance or even something as relatively straightforward as releasing equity to invest capital in to a business. At Christie Finance we use our specialist knowledge of these sectors to demonstrate to banks the strength of a proposal, supported by market knowledge which has been accrued over the 35 years we have operated in the retail sector.
As far as banks are concerned, retailers and forecourts are not seen as ‘high value’ sectors. Because of this there appears to be a lack of support and access to essential services such as customer services and communication of terms and conditions. To this end, Christie Finance will not only secure borrowers the right finance for them and their business, we also aim to connect operators with bankers and financiers who understand these core sectors and who can provide the level of service these undervalued sectors receive.
Arranging finance for a Convenience Store, Off Licence, Post Office or Petrol Station is still highly challenging, even in this pre-recession era. Therefore discussing your requirements with someone who knows and understands the sector, as well as having strong presence in the finance market, is a sensible route to take.
To discuss your requirements please feel free to contact Stuart Pawelczyk on 0121 452 3701 or at stuart.pawelczyk@christiefinance.com
