Legal Requirements When Opening a Convenience Store

Whether you’re buying your own building or an existing business, you can’t just open your doors and start selling. The UK has strict legal requirements designed to keep everybody safe. However, what licenses you need depends on what you’re selling and the services you provide.

Instead of figuring this all out for yourself, we’ve provided a rundown of the licenses you’ll have to acquire.

Are there legal requirements for opening a convenience store in the UK?

Convenience stores have all manner of legal requirements. If you’re storing, selling, or even preparing food, you must register with your local environmental health department and comply with the Food Safety Act.

On the other hand, you might sell restricted items like alcohol and cigarettes. These require a license and a set of regulations to comply with. Likewise, expect to be in regular contact with the local authority for help and guidance.

You might not need any qualifications, but you will need licenses. However, despite this, convenience store numbers are surging, with the first half of 2024 seeing 85 new convenience stores on the map.

What licenses do you need to open a convenience store in the UK?

As a minimum, you’ll have to register your corner shop as a food business with your local authority. The law states that you count as a food business if food products make up more than 25% of your trade. Likewise, you’ll need a premises license to operate.

Although these two licenses are what you’ll need to open your store, the chances are you’ll also be selling other restricted items, and those will also require licenses.

Here’s a rundown of the licenses you may need:

• Food Business Registration – Any business making more than 25% of its revenue from food products must register as a food business with their local authority.
  

• Premises License – A premises license will be required if you plan to sell alcohol. It’ll be assigned to your business premises and is one of two licenses needed to sell alcohol.

• Alcohol Premises License – In England and Wales, the Licensing Act requires you to get the above premises license and a personal license to sell alcohol. The latter requires training and an accredited qualification.

• Tobacco Retailing – Selling tobacco means you’ll need to get an Economic Operator Identifier Code and a Facility Identifier Code. Contrary to popular belief, there isn’t actually a dedicated license needed to sell tobacco in the UK.

• Music License – Want to play background music in your convenience store? You’ll have to apply for a music license from PPL PRS Ltd. and pay an annual fee.

Every license has its own requirements and costs. Some are relatively easy to obtain, such as registering as a food business, whereas acquiring a personal license to sell alcohol is more in-depth.

Average cost of licenses for a convenience store

Go back to your business plan and check if you’ve factored the costs of your licenses into your numbers. Most licenses aren’t particularly expensive, but they’re still extra costs you’ll have to pay to operate legally.

Here’s a rundown of what you can expect to pay:

• Food Business Registration – Free

• Premises License – £100-£1,950 (based on the rateable value of the property)

• Alcohol Premises License – £10

• Tobacco Retailing – Free

• Music License – £450 per year (dependent on floor space)

Note that the processes involved in applying for and maintaining said licenses vary based on where you are in the country. Typically, England and Wales follow the same processes, whereas Scotland and Northern Ireland have slight variations.

Insurance regulations when opening a convenience store

Your insurance requirements will depend on how you run your store. Interestingly, you might not need any insurance at all—although this is always a bad idea!

If you work alone as a self-run business, aren’t planning to hire staff, and own the building outright, you’ve no obligation to take out insurance. But most stores aren’t in this situation, so you’ll likely need some form of insurance.

Hire staff? You must hold £5 million in employers’ liability insurance. Got a mortgage on your building? Your bank will usually require you to have commercial building cover and public liability insurance.

Most insurance policies are bundled into a single package, often called “shop insurance” or a similar name. Examples of cover that might be included are:

• Public Liability – Public liability deals with cases made against you by the public if they’re injured or their personal property is damaged in your store.

• Employers’ Liability – Anyone who hires staff needs this coverage, or you could be fined up to £2,500 a day. This coverage kicks in if an employee sues you for illness or injury.

• Building Cover – Commercial building cover protects your bricks and mortar from everything from natural disasters like floods to fires and even vandalism.

• Stock Cover – Building cover protects the bricks and mortar, but stock cover protects what’s inside. For example, if your stock room floods because of a burst pipe, you can claim on your stock cover policy.

• Business Interruption – If you can’t open your doors because of a disaster, business interruption insurance covers your finances whilst you’re unable to trade.

• Personal Accident Cover – One-man operations are vulnerable because if you’re injured or ill, who will run your business? If you find yourself in this situation, personal accident cover provides a financial cushion.

Beyond the legal minimum insurance that applies to your shop, it’s up to you what coverage you include as part of your policy. Speak to an insurance broker for more information on creating a bespoke policy.

Main legal considerations when opening your corner shop

Running any business means there’s a raft of laws you’ll have to navigate. The UK’s regulations are designed to keep customers safe and ensure high standards for the UK’s business community.

Here are some areas you’ll have to think about:

• Employment Law – Hiring staff means you’ll have to comply with employment laws, including holiday entitlements and paying the National Minimum Wage (NMV). If you’re hiring a local kid for a paper round, you’ll also have to register with your local authority.

• Health and Safety – Health and safety regulations will apply to keep customers and employees safe. This includes proper food handling procedures and food safety.

• Copyright – Branding your corner shop means you’ll have to avoid falling foul of copyright laws. This includes your business’s name, logo and even the music you have playing in the back.

• Data Protection – If you’re collecting personal information, such as for a loyalty card scheme, you must ensure that you follow the UK’s data protection laws.

• Age-Restricted Items – Age-restricted items, such as fireworks, tobacco, and alcohol, also have requirements. For example, you must ensure that you comply with tobacco display rules.

Breaking any of these laws could result in serious financial penalties for your shop. In some scenarios, you may even have to consider the possibility of criminal charges.

Starting your corner shop business the right way with Cogogo

Speak to the Cogogo team today to find your next business venture and ensure the setup process is done the right way. View our latest listings for convenience stores for sale near you to get started!