Retailers hit hard by insolvency in 2013
Nearly 1,300 retailers were deemed insolvent during 2013, with the rapid increase in supermarket convenience stores placing pressure on many smaller outlets.
It represents a 12% rise in the number of insolvencies compared to the previous year, according to accountancy firm Wilkins Kennedy.
Meanwhile, footfall in UK high streets fell for a second month in a row, suggesting that the economic situation is not as bright as some might propose.
Retail footfall fell by 0.2% in May compared to the same month in 2013 while high street footfall was down by 0.9%, according to the British Retail Consortium.
Footfall also decreased by 0.1% in April, although an increase in internet and out-of-town shopping is maintaining retail growth.
Smaller, convenience style stores can struggle to compete when up against larger chain stores as economies of scale plays its part.
The sector is growing with several leading supermarket chains reporting that their smaller stores will outnumber their supermarkets at some point in 2014.
Industry body IGD has also suggested that the convenience sector will grow by more than £10bn between 2013 and 2018.
For those businesses facing insolvency, taking the necessary action at the right stage in the process can be vital to limiting any negative factors.
Seeking corporate insolvency advice from professionals is recommended as it provides a greater period of time for any contingency measures to be implemented.
Following market trends is also important – especially given the long-term tendency for shoppers to move away from the high-street.
As a result, considering the long-term future of a business is vital to finding solutions to potential issues that could occur.
The insolvency figures for 2013 serve as a reminder for many retailers and small businesses to not rest on their laurels in the current environment.
By Phil Smith