How much is a shop in the UK [2022]

Starting up a shop can be a huge investment of time and effort. Before you start doing anything, it’s critical that you know how much money you’ll need for your first year of operations.

Rent for a storefront in the UK will cost anywhere from 100 pounds per square foot per year in a rural area to 2,150 pounds per square foot per year in London’s West End. This price will likely cover upkeep for the public space around the building as well as insurance.

However, there are other costs associated with a shop aside from the retail space. Let’s take a closer look at the cost for retail spaces across the UK and what else shop owners will need to pay for.

The Price of Space In the UK

The price of retail space in the UK varies pretty significantly depending on where in the country you are. Obviously, things will be more expensive in a big city like Manchester or Birmingham, and the most expensive in London. They’ll be the least expensive in smaller towns with access to fewer people.

These prices are all measured in pounds per square feet per year, which means to get the price of a place you’re thinking of renting take its approximate area and multiply it by the amount given here. This will quickly add up in a place like London, where what you pay can be in the thousands of pounds range.

The average convenience store is 1000 square feet total in size, so we’ll use that number for the size of the store in our examples. We’ll also give the raw price so you can work backward from the amount of space that you’re aiming for. These are also street retail spaces, which are usually the most expensive retail spaces on the market.

Less prime spaces will often be worth quite a bit less, and this can make a huge difference in some of the more expensive areas covered here.

London Breakdown

West End – Bond Street

The West End is the most expensive part of London to start a business in. Here, retail space costs 2,150 pounds per square foot to rent. For a 1000-square-foot store, that will end up being 2,150,000 pounds every year. Fortunately, London’s West End is an outlier when it comes to rent prices.

Because of this, people looking to start a business here may want to look into business models that allow them to save money on space, or make sure that they already have a profitable customer base before making plans to move in.

West End – Oxford Street

Oxford street doesn’t quite have the same high cost as Bond Street does. For one year, retail space will cost 620 pounds per square foot. this will be 620,000 pounds per year in a 1000 square foot space. This is still a hefty price compared to spaces outside of the West End but is certainly a better option than Bond Street.

If you want to start a business in this area, Oxford Street is probably the place to do it. With a metro station on the street, this street sees pretty significant foot traffic.

City

Outside of the West End, retail space costs 240 pounds per square foot per year. For 1000 square feet, this will be 240,000 pounds per year. This is a little higher than it is in other big cities across the UK, but not by that much. It’s certainly closer to being affordable than the West End.

Outside Of London

Manchester

Retail space in Manchester is 220 pounds per square foot per year or 220,000 pounds per year for a 1,000 square foot space. It is quite close to London proper in price, which makes sense considering that Manchester is a pretty big city.

Edinburgh

Edinburgh is the third most expensive city to rent retail space in, costing 210,000 pounds per year for a 1,000 square foot space or 210 pounds per square foot per year.

Birmingham

Prime street retail space in Birmingham will usually cost 180 pounds per square foot per year or 180,000 pounds per year for 1,000 square feet.

Cardiff and Leeds

Per square foot, you will pay 140 pounds on real estate in Cardiff and Leeds. For 1,000 square feet, you will pay 140,000 pounds per year.

Bristol

In Bristol, you will pay 95 pounds per square foot per year, which totals 95,000 pounds per year for 1,000 square feet.

Across England, the average retail space costs 37.75 pounds per square foot. Outside of big cities rents are likely to be closer to this than to anything else.

Furnishing Space

 

 

Once you have a retail space, you’ll need to get it ready to do business in. If you’re serving food, this will mean purchasing specialized equipment alongside cash registers, counters, and decorations. Your customers will notice the effort put in, especially if you have a space that’s unique and special. Even if the thing you’re selling can go on a shelf, you’ll still need to invest in a couple of shelves to house such things.

Here are a couple of types of retail stores and the furnishings and equipment a business owner will need to pay for during their first year in business.

Restaurant

A small-scale restaurant will be spending 25,000 pounds to 40,000 pounds on equipment in its first year. This may seem like a lot, but it’s needed to be able to store and produce food at the necessary scale for a restaurant in the UK. As for furnishings, these will set people looking to start a restaurant back about 15,000 to 35,000 pounds.

This may include the fees to hire an interior designer as well as the price of tables, and chairs. crockery, and any other design elements that you may choose to add.

Retailer

The cost to fit a retailer with the various furnishings it may need will vary between 60 pounds and 140 pounds per square foot depending on the quality of fittings you need and whether you need any specialized equipment such as refrigerators or glass cases.

You may also want to paint the inside of the building, which will cost a further 50-100 pounds per hour worth of contractor labor to get done right. Finally, you’ll need to get any kind of payment processing equipment that you need to use set up. This could include cash registers, which cost 850-1,600 pounds per unit.

Don’t skimp on your cash registers, as if you have an easy-to-operate newer cash register, life for you and your employees will be much easier.

Other Costs For Starting a Shop

 

 

The biggest cost when it comes to starting up a shop is almost always rent. Especially in big expensive cities, this can cost a ton of money. Here are some other expenses that you’ll need to watch out for, especially in your first year.

Business Rates

Business rates are levied by local councils to help pay for public services. Contrary to some reports, they are not and will probably never be a larger business expense than rent, as business rates are pretty much always a percentage of monthly rent rather than a fixed rate.

For instance, if you have a business rate of 30% and are paying 1,000 pounds per month, your business rate will be a little over 300 pounds per month. This is a lot of money, and business rates can get pretty high. Fortunately, they tend to cost around 50% of the rent.

Make sure to do your research, find the business rate of the property you’re looking at, and add that to your expected monthly costs. Not doing so can lead to some pretty frustrating months.

Luckily, the UK government will frequently give businesses some time off from paying their business rates to stimulate the economy. Don’t count on this happening, but when it does happen it’s a great opportunity to invest some extra money into staff, fittings, and marketing.

Insurance and Lawyers

Having insurance can protect you from the losses that can destroy a small business as a result of such disasters as an employee injury or a fire in the building. Unfortunately, insurance companies hate paying their customers what they owe, so they make it as hard as possible for you to complete a claim. To ensure that you can actually access the services of your insurance company, you’ll need to keep a good lawyer on retainer.

Keeping lawyers on retainer essentially means paying a law firm a monthly fee so you can be given an hour or so of time each month to consult with them on legal issues. This can be especially useful when signing important contracts like those you’d sign with an insurance company. This will help you to ensure that you’ll actually be able to access any insurance money you may need.

They can also help you to write employee contracts, make sure your paperwork is up to date, and make sure that you’re aware of any regulations relating to your business. For smaller companies, this is usually much cheaper than hiring a lawyer to keep track of things full time. A retainer service will usually cost about 150 pounds per month, and even if you stop using it after your first year, it’s a great investment during your starting period.

Insurance will cost you between 100 pounds per year for single traders and 800 pounds per year for businesses with multiple employees. Especially if you know you can get good legal representation, this is absolutely worth the money.

Registration

Registering your business is going to cost somewhere between 12 and 100 pounds depending on the specific kind of business you’re opening.

Inventory

It would be a tragedy to work so hard to set up your new business only to forget to buy your inventory, the thing that you actually need in order to make money. Inventory costs will be a significant portion of your business expenses for pretty much the entire time that your business is running, which makes it all the more important to get them settled at the beginning of your project.

The price of keeping inventory depends entirely on your specific business, which means that you’ll have to calculate them by yourself. Generally, you’ll want to have enough stuff that you don’t run out, but not so much that you could never possibly sell it all.

Website

Having a good website can really help improve your marketing campaigns, as it gives customers an easy place to get more information in the situation that they take interest in you. You can get a solid website on a platform like Wix or Squarespace for about 11 pounds per month.

If you want to use your website for commerce, WordPress and Shopify can both work great. Shopify costs 21 pounds per month, while WordPress is free but will require you to spend a couple of pounds on hosting and a domain each month.

Hiring

You’ll need to spend some time finding people to work for you, which will likely involve using a recruiting website such as Indeed, LinkedIn, or Monster. Indeed is the cheapest of these, which each post costs only about four pounds. LinkedIn is the most expensive, requiring a 1,900-pound subscription each year to access its recruiter features.

This can make hiring feel pretty expensive, but these services do certainly make it much faster and easier to find prospects. Once you do hire the people you need, you’ll need to keep in mind their pay as well. Keeping employees well paid is the key to good customer service and the key to amicable employee relations, no matter what your business sells or does.

The National Living Wage in the UK is 9.50 pounds per hour, and this is the minimum amount that employers can pay somebody who is older than the age of 23. Paying more than this will help attract talent and keep the people you have from leaving for your competition, but if all you can afford is the living wage you shouldn’t feel bad about starting out there while you get the ball rolling.

Putting It All Together

You have a lot to think about when you’re starting up a new shop. From the cost of rent in your city to the recruiting and wages, you’ll need to make a plan if you ever really intend to get things off the ground. Hopefully, this analysis can help you get that done!