UK convenience stores have cuts 2,000 jobs over an “extremely challenging year” after coming under pressure from soaring labour costs and fierce competition from supermarkets.

The Association of Convenience Stores (ACS) warned that pessimistic consumers and increased costs for retailers are therefore putting the UK’s 50,000 local shops under pressure, resulting in weaker investment and fewer jobs.

James Lowman, chief executive of the trade group, said: “This has been an extremely challenging year for local shops as the cost of doing business has risen significantly while sales have stagnated due to fierce competition from discounters, supermarkets and other retailers.

“These figures should serve as a warning to Government that we cannot continue taking the brunt of additional costs and other burdens without the impact being felt by the communities that these essential stores serve.”

Figures from the ACS annual local shop report showed that there was a slight increase in the number of convenience store this year to 50,486, but there was nevertheless a drop in jobs and sales in the sector.

The number of jobs across UK convenience stores slipped from 445,000 last year to 443,000, according to the new data.

It also showed that total projected sales for the year is set to be around £48.8 billion, compared with £49.4 billion a year.

Store owners said sales have been impacted by fierce pricing competition from discount supermarkets, such as Aldi and Lidl, while other larger supermarket chains have also invested heavily into their pricing to stave off this competition.

The report also showed that the amount invested by retailers fell by £100 million from £1 billion to £900 million for this year.

Convenience stores have come under pressure from the increase in the national living wage, higher National Insurance Contribution (NICs) and reduced business rates discounts.

The ACS said these labour costs and tax changes will cost retailers around £612 million more this year.

Mr Lowman added: “Despite the challenges, convenience stores are still right at the heart of communities, more relevant than ever to people’s daily lives, and making a positive difference not just through diversified products and services, but as job creators, investors and social hubs.

“Every community has different needs and our members’ greatest asset is being able to adapt their offer to meet those needs.”