Retail apocalypse: More than 2,000 stores went bust as UK high streets suffer
Over 2,000 retailers have gone bust in the last year, a new report has found, delivering another blow to the UK’s struggling retail sector.
According to a study by Mazars, the international audit, tax and advisory firm, the number of insolvencies of retailers has increased 19 per cent in the past year to 2,195 in the year to 2024.
Today’s report highlights the plight of the UK high street which has seen a number of brands plunged into hot water due to rising costs and shoppers spending less.
High profile insolvencies include The Body Shop in February, as well as fashion brand Ted Baker and online luxury fashion retailers MatchesFashion and Farfetch.
Aurelius, the German owners of the Body Shop, announced the ethical cosmetics company would appoint administrators after poor trading over Christmas.
Questions about the lifespan of fashion brand Superdry also remain, after founder Julian Dunkerton failed to find a backer to help take the business private again.
It follows on from the collapse of Paperchase and Wilko last year, wiping hundreds of stores off the high street.
Mazars said that many retailers have been hit by a combination of increased costs and cautious household spending among consumers.
“Higher interest rates are also causing significant problems for any retailer that has a significant level of debt that is either “floating rate” or that is coming for refinancing,” Mazars said.
Data from the ONS reveals that retail sales fell by 3.2 per cent in December 2023, their sharpest monthly decrease since January 2021, highlighting the impact of low consumer spending on retailers.
The number of e-commerce insolvencies also reached its highest level in five years, topping 615 in 2023/24, an increase on the 521 insolvencies reported in the previous year.
Rebecca Dacre, partner at Mazars said: “We are unlikely to see the retail sector trading comfortably until interest rates start to fall.”
“Despite inflationary pressures easing, high interest rates and low consumer spending continue to persist.”
“The rise in the National Living Wage is the largest on record and some face a sharp rise in business rates from April.”