Nightmare before Christmas? Nearly 4,500 UK retailers are in ‘critical financial distress’
Nearly 4,500 UK retailers are in “critical financial distress” amid the ‘Golden quarter’ due to weak Christmas sales performances, insolvency specialists Begbies Traynor has warned.
A damning report published by the firm shows the number of retailers in choppy waters has shot up by over 500 in the fourth quarter.
In quarter three some 3,981 retailers were in this position.
Begbies said almost 46,000 retail businesses in the UK are now also in ‘significant’ financial distress, 7.5 per cent higher than the term before and 4.6 per cent higher than the same period last year.
A squeeze on public finances has battered retailers over the last year, as high inflation has led many to steer clear of the high street.
The news is a fresh blow for retailers who were hoping the vital Christmas trading period would help drive up sales in one final push for the year.
Food and drug retailers are amongst the hardest hit, with the number of businesses in ‘critical financial distress’ up 10 per cent.
Julie Palmer, partner at Begbies Traynor, said: “There is no doubt about it, the last 12 months have been incredibly difficult for British retailers as an increasingly tough economic backdrop continued to pile on the pressure, with businesses that were only just standing on two feet again now feeling the pain this Christmas.
“And, after a year where consumers faced one of the worst cost-of-living squeezes on their wallets, the shopping bonanza many retailers were relying on this Christmas does not seem to have materialised, pushing many businesses close to financial ruin this winter.”