One hundred and eighteen retailers fell into administration last year, marking the first rise in casualties in five years as the sector struggles with rising inflation, wage costs and property taxes.
According to new data from accountancy firm Deloitte, the number of retailers with 10 stores or more that collapsed last year rose by 54 per cent to 17, compared to an overall increase of 28 per cent.
“We have seen a significant increase in retail insolvencies in the last twelve months including some well-known names”, Deloitte’s Dan Butters said.
“We see insolvencies in higher value categories, such as furniture, as a leading indicator that falling consumer confidence, and a drop in consumer spending, is starting to bite.
“This has implications for retail sub-sectors with a lower price point which typically take longer to feel the impact of reduced consumer spending.”
This trend is likely to extend into 2018, with large retailers like New Look and Debenhams posting worrying financial results for the usually lucrative Christmas period
Yesterday GlobalData Retail’s UK Research Director Patrick O’Brien warned that “some big names will go bust” in the coming year, stating that the number or retailers reporting post-Christmas distress was unprecedented.