Retail insolvencies remained flat in the lead up to the Budget, shows a recent report, though experts feel that a wave of distress is expected following the Chancellor’s increase in employers’ National Insurance contributions and National Minimum Wage.
Today’s company insolvency statistics show retail trade insolvencies fell slightly from 2,101 in the 12 months to September 2023, to 2,089 in the 12 months to September 2024, and were flat month-on-month (137 in August 2024 to 138 in September 2024).
Gordon Thomson, restructuring partner at leading audit, tax and consulting firm RSM UK, said, “While retail insolvencies were flat in the lead up to the Budget, a wave of distress is expected following the Chancellor’s increase in employers’ National Insurance contributions and National Minimum Wage, due to the vast number of people employed in the industry.
"The current statistics may be the calm before the storm as additional costs put further pressure on retailers’ already-stretched margins, leading to an increased rate of insolvencies in Q1 2025.
“Consumer confidence has been shaky in the lead up to the Budget, and it’s crucial this returns to avoid a disappointing Black Friday and Golden Quarter. Confidence is needed to drive a boost in consumer spending and to the overall UK economy, which saw meagre growth of 0.1% in the last quarter.
“The retail sector is also grappling with increased crime rates, which not only has a devastating impact on margins but also on staff morale. The government’s promises to tackle shoplifting are more important than ever during this festive period, but that alone won’t be enough to revive the sector.
"Retailers will be holding on to see how the next few months perform, but further support is needed to avoid more having to close their doors for good.”
