Wholesale and retail trade insolvencies spiked in April this year, shows a report released today (18), highlighting how tough trading environment continues to drag on.
According to the report by The Insolvency Service, wholesale and retail trade insolvencies increased 27 per cent in April 2024 (from 280 in March 2024 to 355 in April 2024) and were up 30 per cent on April 2023 (274).
Wholesale and retail are among the five industries (in accordance with SIC 2007) that experienced the highest number of insolvencies in the 12 months to April 2024.
Responding to the figures, Gordon Thomson, restructuring partner at leading audit, tax and consulting firm RSM UK,commented,“The tough trading environment for the retail sector continues to drag on, resulting in an increase in insolvencies in April. As retailers grapple with high costs, lack lustre consumer demand and too many April showers, they were also hit with an increase in national minimum wage which may have been the final straw for some.
“However, with inflation easing, real wages growing, and interest rates set to come down, this bodes well for consumer confidence and sets the stage for an increase in consumer spending in the second half of the year. For those retailers that have managed to weather the storm thus far, there’s light at the end of the tunnel.
“We expect the current high levels of distress to decline later this year as retail sales improve. That said, retailers will be looking to the next government to ease the current headwinds faced by the industry, including reform of business rates and a U-turn on tax-free shopping.”
