The latest company insolvency statistics reveal a mixed picture for the retail sector, with 157 retail trade insolvencies recorded in October 2024. While this represents a 25 per cent decrease compared to the same month last year, which saw 210 insolvencies, it marks a 14 per cent increase from September 2024, which reported 138 cases.
Gordon Thomson, restructuring partner at RSM UK, highlighted the sector’s cautious optimism amid ongoing challenges. “Retail insolvencies continue their year-on-year decline as retailers pin their hopes on stronger sales in the lead-up to Christmas, especially after the 0.7 per cent drop in sales seen in October,” Thomson said.
While consumer confidence shows signs of improvement, it remains subdued, he noted. “The hope is that it continues to grow and a consumer-led economic recovery comes to fruition next year, aided by increased wages and gradually declining interest rates. This could encourage consumers to spend more on the high street,” Thomson explained.
However, Thomson warned that the upcoming quarter would test retailers' resilience.
“Next quarter will already be a challenging period for the retail sector due to typically lower trade, plus with various costs increases coming down tracks, retailers can ill afford to bury their heads in the sand,” Thomson said, urging businesses to assess their financial viability and act decisively if needed.
Without further government intervention to support the retail sector, Thomson cautioned that only the most robust businesses are likely to weather the storm.
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