Huge rise in retailers facing collapse - but it's not just the high street struggling
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The number of shops on the brink of collapse has surged by a quarter in recent months, a new report has revealed. The strain on the retail sector follows new data showing a drop in the number of people hitting the high street during the Boxing Day sales.
The latest Red Flag Alert report from insolvency specialist Begbies Traynor found 2,124 UK retailers were in “critical” financial distress between October and mid-December. This was 25% higher than in the previous three months - July and September - although it marked a slight decline of nearly 1% compared with the same period a year ago. The latest figures include a 29% quarter-on-quarter surge in the number of general retailers on the brink of collapse, and a 17% jump among food and drug retailers. Online sellers, takeaway food shops and mobile food stands, and convenience shops were among the businesses struggling the most.
Julie Palmer, a partner at Begbies Traynor, said: “This year has highlighted the resilience and adaptability of some UK retailers, but the sector remains under significant strain. Clearly, some retailers have found ways to manage financial pressures effectively, but others, particularly in general retail, are struggling under the weight of rising operational costs and squeezed consumer spending.”.
The report from Begbies comes after data from MRI Software showed Boxing Day shopper footfall was down 7.6% across all UK retail destinations compared with last year. However, it said this largely reflected a shift to online shopping, with analysts expecting consumers to do the majority of their sales shopping online this year. Clothing and footwear retailers had a weaker November than previous years with sales volumes declining by 2.6% for the month, according to the latest official figures.
