Nearly 40,000 retailers are in financial distress and at risk of collapse amid the pandemic – before Tier 4 restrictions forced many non-essential stores to shut again.
The alarming figure for the three months to December 9 was a 24 per cent increase on last year and 11 per cent higher than the previous quarter, insolvency experts Begbies Traynor said. It covers both store-based and online firms.
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London’s Oxford Street is seen largely empty today in the run up to Christmas[/caption]
It comes as the pressure is set to ramp up again on the high street in the next few days. The next quarterly rent bill falls due and Boxing Day sales are expected to disappoint.
Begbies Traynor said 2020 had been “ one of the toughest years ever experienced in the retail sector”.
“While many industries have been hit hard, retail has been shaken to its foundations,” Julie Palmer, a partner at the insolvency specialist, said.
“High-profile administrations such as Arcadia and Debenhams not only threaten thousands of jobs but also raise questions over the future of the high street as we know it.
“I expect there to be more as we enter the new year.”
The hospitality sector has also been hard hit, the figures show.
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In a period that would usually have seen Christmas parties, extensive travel, and tourist visitors to festive attractions, the lack of activity has hit the hotels & accommodation industry the hardest, with over 7,500 now in significant distress, up 34 percent on the same time in 2019.
Bars & restaurants are also suffering, with the number of struggling businesses up 18 percent on Q4 2019 to nearly 21,000.
“The hospitality sector has been brought to its knees by the Covid-19 restrictions, with many operators either having to shut or completely change their business models to suit differing tier-based restrictions,” Ms Palmer commented.
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