Stats released today by The Insolvency Service unveiled a 2% decline in company insolvencies in August compared to the month before, but remain 6% higher than in August 2024.
Construction, Wholesale and Retail Trade, Accommodation and Food Service topping the table of struggling industries – responsible for 47% of all company insolvencies.
Giuseppe Parla, Business Recovery Director at Menzies, warns that the festive season could decide the fate of Britain’s high streets.
Parla said, “With more high street casualties hitting the headlines, from Bodycare’s administration and store closures, to Poundland’s near miss and record sector job losses, UK services are running out of options to protect margins and plan ahead of a critical shoulder season.
Today’s statistics show that the hospitality sector accounts for 14% of all insolvencies in the last year, while retail takes 16% of the share. While reports show retail sales have ticked upward, experts caution that this growth could reflect price inflation rather than stronger demand.
Economic growth is stalling, and with interest rate cuts expected to be absent from the upcoming Budget, delayed relief leaves consumer spending subdued. The reality is that businesses remain squeezed by heavy tax burdens, rising staff costs, and fragile consumer confidence, which raises considerable concern in the run-up to Christmas.
Sector groups are urging VAT cuts to ease inflationary and cost pressures, but with little fiscal headroom, such relief is uncertain – but it could prove a lifeline for operators battling soaring costs. For many retailers, the festive season will once again decide whether they can weather the storm.
As ever, our message would be for businesses to act early if they anticipate financial trouble. Doing so ensures that more options are available for you to secure a profitable future and remain trading.”
