Shop for Sale in the UK: Checking Stock, Footfall and the Lease

If you're looking at a shop for sale, the asking price is only part of the picture. Most of the risk in a retail purchase sits in three places: the stock (what it's really worth), the street (whether customers will keep walking past) and the lease (how long you can stay and on what terms). Check those, plus the online side and supplier accounts, and you'll know whether the price stacks up.

How is stock valued when you buy a shop for sale?

In many UK retail sales, stock is not included in the asking price. It's added on top as "stock at valuation" (SAV), counted on completion day, often by an independent stocktaker that buyer and seller agree on and share the cost of. Read the listing carefully so you know which applies.

A stock count tells you how much is on the shelves, not whether it will sell. Ask for stock turn: cost of sales for the year divided by average stock value at cost. A low figure means cash tied up in goods that sit still. What counts as "good" varies widely by sector, since a newsagent turns stock far faster than a jeweller, so compare like with like.

Then agree in writing, before the count, how different stock will be treated:

Stock type	Suggested treatment
Current, regularly selling lines	Cost price
Slow-moving (no sales in an agreed period)	Discounted value agreed in advance
Damaged, out of date or discontinued	Nil value or excluded

It's also worth agreeing a maximum total stock value, so the seller can't over-order before completion and leave you with a bigger bill than expected.

How to check footfall on the high street

The accounts tell you about the past. Footfall tells you about the future. Visit at different times: a weekday morning, lunchtime, late afternoon and a Saturday. Count people passing in ten-minute blocks and note how many come in.

Watch for signs the street is changing:

• Empty units, and what has replaced shops that closed
• Nearby anchors such as a supermarket, post office or bank, and any plans for them to close or move
• Changes to parking, new restrictions or long-running roadworks
• Planning applications on the council's website for housing, new retail parks or redevelopment
• Whether a Business Improvement District or the council publishes footfall counts

Then ask the seller for monthly sales over the last two or three years. If takings are falling while the street looks busy, ask why. If the street is visibly declining, the past figures may flatter the future.

What lease terms should you look for in a retail shop?

Most shops are leasehold, so you'll usually take an assignment of the existing lease or negotiate a new one. Either way the landlord must consent, and may ask for accounts, references, a rent deposit or a personal guarantee. Budget time for this; it often slows sales down.

Go through these points with your solicitor:

• Remaining term: long enough to recover what you pay for goodwill and any refit. A short term can also make lenders cautious.
• Security of tenure: whether the lease is inside the Landlord and Tenant Act 1954, which generally gives a right to renew, or contracted out.
• Rent reviews: when the next one is due and whether it's upward-only.
• Break clauses: who can use them and when.
• Repairs: on a full repairing lease you may be responsible for the building. Ask for a schedule of condition and check for dilapidations claims at the end.
• Permitted use: make sure it covers what you plan to sell.
• Running costs: service charge, insurance and business rates. Check the rateable value with the Valuation Office Agency, as reliefs the seller gets may not apply to you.

How much of the trade is online, and who owns it?

Ask for sales split by channel: in-store, own website, marketplaces and social media. Then find out who actually owns each piece. Domains are often registered in the owner's personal name, and some marketplace seller accounts can't be transferred under the platform's rules.

Make a list of the domain, website platform, email list, social accounts and marketplace accounts, and write their handover into the sale contract. Customer email lists raise data protection questions, so take advice. If a large share of sales comes through an account you can't take over, the price should reflect that.

Will supplier terms transfer to a new owner?

Often not automatically. Credit terms are usually based on the seller's trading history, and a new owner may be put on pro forma (pay before delivery) for a while, which squeezes cash flow. Exclusive area rights, approved stockist status and volume discounts can also be personal to the seller.

Ask for a list of the main suppliers with their share of purchases, and ask the seller to introduce you before exchange. Get written confirmation from key suppliers of the terms you'll receive. If staff are coming with the business, they'll normally transfer under TUPE, so ask for full employment details too.

When you're ready to compare options, browse retail shops for sale on BizMarketplace, or narrow it down to retail shops for sale in London or businesses for sale near you. Whatever you find, have an accountant review the figures and a solicitor review the lease before you commit.