One in five retailers fearing collapse by end of 2023
Over a fifth (22%) of UK retailers worry that their business will not be solvent by the end of 2023, new research suggests.
Advisory firm FRP surveyed 250 large and medium-sized businesses, with the findings presenting “significant concerns”.
Three in five (60%) of respondents said that energy costs were the biggest pressure on their profit margins, while 22% fear insolvency by the end of 2023 if the Government sticks with its plan to reduce relief on energy bills after April. A third of those surveyed said they would like to see the Government increase energy support into the new tax year.
With costs continuing to increase, FRP found that over a third (36%) of retailers have passed on their general cost increases to customers in the last year, with 32% expecting to do the same this year.
68% of those surveyed said they anticipate seeking more support from lenders this year.
FRP have previously advised on the administration of retailers such as Debenhams and Edinburgh Woollen Mill.
Phil Reynolds, restructuring advisory partner and retail specialist at FRP, said: “These are incredibly turbulent times for retailers. Inflation is pushing up operating costs and dampening consumer confidence, with the looming recession likely to ensure that conditions remain challenging for some time to come.
“However, against such a dynamic backdrop and strong headwinds, the sector is working hard to adapt – with the majority expecting margins to hold up through the next six months and beyond.”
In January, insolvency firm Begbies Traynor warned that increasing numbers of small business would be vulnerable to collapse, as repayments, cuts to energy bills relief, and high inflation all loom.