Retailers are buckling under the weight of bad debt, according to data on failing UK companies.
According to Creditsafe, there has been a massive 2,464.5 per cent in the level of debt owed to retail companies which they are not likely to get back.
This amounts to a rise of more than £51.5m, bringing the total to £53.6m.
It adds to a high level of financial pressure on the UK’s retailers, which are already struggling to cope with rises in business rates, rents, and labour costs.
The data also showed that there was a 59.4 per cent increase in the number of insolvencies in the sector in the second quarter of this year, compared to the same period last year.
This is compared to an overall rise of 30 per cent in insolvencies across all industries.
However, the turmoil in the retail sector has not prevented new players from entering the fray. The number of new companies was up 40 per cent, with 11,475 registered in the second quarter.
Chris Robertson, UK chief executive of Creditsafe, commented: “2018 is proving to be an extremely difficult year for the UK high street, with many well-known chains unable to cope with increasing numbers of consumers visiting larger stores and turning to online shopping. The growing number of job losses and empty shops right across Britain is a big cause for concern.
“Nevertheless, it’s promising to see the resilience of entrepreneurs in deciding to open up new businesses in the face of uncertain and changing market conditions. It’s this positive attitude that will be needed to see the retail sector through this tough period.”
It has been another tough couple of weeks for retailers, with Poundworld’s administrators announcing last week axing another 80 stores on top of an initial 25 closures while they negotiate with possible rescue buyers.
