Julie Palmer, a partner at Begbies Traynor, said 140 retailers were on the firm’s “critical watchlist” – defined as businesses that had received either a winding up petition or a county court judgment against them in excess of £5,000.
There had been a 35% rise in the number of retailers experiencing significant distress before Christmas, meaning 13,700 shopkeepers either experienced a sustained period of deteriorating finances or were in receipt of a county court judgment of less than £5,000.
The health of the high street is key to employment data and consumer confidence. With some 3 million people working in the UK retail sector, it is the biggest private sector employer.
“Overall, the sectors that are most vulnerable include those affected by shoppers moving to online or digital formats, such as specialists in music, games, books, news and stationery along with the specialists that are most affected by the convenience and price-driven offering of the supermarkets, which includes chemists, health and beauty, and alcohol retailers,” Said Palmer.
The gloomy outlook for the sector came as the music chain HMV followed camera-supplier Jessops into administration after lengthy battles by both companies to unearth business models that could compete with online retailers.
Blockbuster UK is the latest retailer to collapse into administration!
Michael Ingram, a market analyst with City broker BGC, said: “UK retail woes don’t end there. Disposable income in the UK is still being squeezed mercilessly: wage growth is running at less than half the rate of inflation (1.3% versus 2.7% on the consumer price index and 3.0% on the retail price index), while inflation in non-discretionary items, such as fuel and water tariffs, is running at over 6%”.
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