C-stores could benefit from the government's decision to close as many as 2,500 loss-making standalone Post Offices by 2009.

The government is keen to encourage more community-run POs to set up in

c-stores and will work with interested parties to provide advice and promote services, said trade and industry secretary Alistair Darling.

Subject to state approval, it will also provide a further £1.7bn until 2011 to support the post office network.

This encouragement could pave the way for more c-stores to open PO branches in-store or gain PO services, retail associations said. The ACS said combining post offices and c-stores was "a very effective way of serving the community".

Gill Wither, manager of ViRSA - the Village Retail Services Association - added: "There is a real synergy between grocery shops and POs, especially with increases in footfall."