Despite headlines of an economy returning to health, the number of UK retailers in “significant” financial problems has soared by 54% over the past year.
A total of 24,251 retailers in the UK are struggling, with food and clothing chains two of the worst-hit groups, professional services consultancy Begbies Traynor revealed in its research.
Last year 15,792 businesses were in distress.
The number of clothing retailers in "significant" distress rose 123% to 1,482.
A total of 3,819 food outlets, a rise of 70%, were found to be in financial difficulties. The price war between supermarkets has had its knock-on effect.
Retailers classified in “critical” distress numbered 135 in the period, a fall of 10% over last year. Some of these were given a boost from Christmas shopping.
The Black Friday event and its associated sales days before Christmas accounted for the strongest retail sales growth in more than 25 years, according to the CBI.
Julie Palmer at Begbies Traynor said: “Black Friday was lauded as the biggest day of retail sales this year, but it seems the only real winners were the largest online retailers and big brand high street chains with the biggest discounts and best online offerings, such as Amazon and John Lewis.
“In a bid to compete, the rest of the UK retail industry has been forced to slash prices and profit margins, but unfortunately sales volumes have failed to keep pace as Christmas shoppers across the UK have been particularly thrifty this year, taking advantage of the significant discounts on offer."
Begbies Traynor did not name any companies involved in their research.
Comments
So the doom and gloom merchants were just winding us up.
That said ... 3bn is being borrowed from the banks. Maybe not so ideal if a substantial number become bad payers and then ... leave the country. As apparently many thousands have done. An Iberian variation of wiping the slate clean ?
All Portuguese banks already having billions in bad debts, thousands of properties foreclosed and now at well below lending value, tens of thousands of distressed home and business owners.
And 92bn already tying the Portuguese banks to the private sector.
http://www.tradingeconomics.com/portugal/loans-to-private-sector