Costs and consumption double squeeze! Number of struggling retailers in the UK increases by 25%

The UK retail industry has faced serious financial challenges in the fourth quarter, mainly due to rising costs and a drop in consumer confidence. The latest report from bankruptcy and restructuring consultancy firm Begbies Traynor shows that the number of struggling retailers surged to 2,124 in just a few weeks from October 1 to December 16, a 25% increase compared to the previous period. Although this number is slightly down (0.84%) from the same period last year, the overall pressure on the retail industry remains significant. Begbies Traynor believes that the sharp increase in struggling retailers is closely related to the approval of the autumn budget, which led to a significant increase in employer costs. Additionally, sales data in November was lower than expected, causing a further blow to the financial situation of retailers as consumer spending decreased during the traditional peak sales season. Nevertheless, the number of struggling retailers has slightly decreased compared to the same period in 2023, indicating that UK retailers have shown some resilience in dealing with financial pressures. Julie Palmer, partner at Begbies Traynor, said: "This year has demonstrated the adaptability and resilience of UK retailers, but the industry as a whole is still under immense pressure. Some retailers have found effective ways to manage financial pressures, however, others, especially general retailers, are still struggling under the dual pressures of rising operating costs and reduced consumer spending."