We have all heard about the recent issues the UK retail sector is facing – a tough trading period due to low consumer confidence, increased online competition and rising business rates. The latest Watchdog report, by Creditsafe, confirms this.
Analysing the second quarter of 2018, Creditsafe report how company failures of the sector have grown almost 60%, with the biggest insolvencies being PoundWorld, Bargain Booze and Kleeneze. PoundWorld became insolvent, most recently, as a buyer was not able to rescue them. Similarly, Bargain Booze failed to survive, after owner, Conviviality failed to encourage shareholders to increase funds for the brand. All in all, 416 retailers have failed so far, which is a rise of 145, compared to the same period last year.
Furthermore, the turmoil is proven by the rising amount of bad debts. This figure has risen by 2465%, up more than £51.3 million. This implies that companies have pressure in trying to keep their heads high, in amongst so many collapses.
Despite the negativity the sector is experiencing, some positives exist. There have been 1475 new companies created, up 40.3% from that in 2017. Retailers, Asda, Iceland and Ocado are showing the most growth, suggesting consumers are choosing to do grocery shopping at larger retailers.
Credit safe CEO, Chris Robertson says ‘’2018 is a very hard year for UK high streets’’. He believes this is due to the new online shopping trend, as well as the rise in customers visiting larger stores. Many job losses and empty shops are bringing a detrimental effect to our high streets. Though the positivity is promising, where entrepreneurs are becoming resilient and opening new businesses, in these altering, uncertain market conditions – ‘’it is this positive attitude that will be needed to see the retail sector through this tough period’’.
Creditsafes Watchdog Report tracks the quarterly economic developments across 12 sectors, with construction, retail, banking and hospitality, but to name a few. You can see the full copy of the report here https://www.creditsafe.com/content/dam/local/uk/pdfs/watchdog-reports/Watchdog-Q2-2018-Full-Report.pdf.