Retail trade knocked by uncertainty

OVER 52,000 retailers are at serious risk of failure, an increase of nearly 49 per cent on last year, according to data from financial health monitoring group Companywatch.

It said that 38,800 firms have a health score of less than 15, while a further 13,124 had health ratings between 16 to 25. A firm that gets rating of 25 or less is placed in Companywatch’s warning area and it said that around one in four of the groups in it go on to fail completely over a three-year period.

It said that 8,287 of the companies in the warning area were not in that position last year, while 10,282 had fallen into the area for the first time.

Opus Restructuring business adviser Nick Hood explained that a combination of Brexit uncertainty, sagging consumer confidence, intense price competition from online rivals, high taxes and operating costs had hammered retailers.

“This has been a hideous year for retailers, battling Brexit-inspired consumer caution and the ever escalating impact of online purchasing for those stuck with bloated high street store portfolios,” he said.

“The timing of Black Friday this time round could hardly be worse for them, cannibalising their normal Christmas trade and savaging already slim profit margins.”

Data from the Office for National Statistics is expected to show that the manufacturing and services sectors are struggling, a small uptick in the unemployment rate and that Government borrowed £6.1billion in November, compared to £5.6billion for the same month last year.