Ongoing uncertainty a major concern for UK businesses

Retailers in the South East are reportedly in a healthier position ahead of the festive season, according to a new analysis of the sector.

Insolvency and restructuring trade body R3 have said the retail sector is one of the most robust in the region, as only a minimal increase in those deemed to be at above average risk of insolvency was recorded in September.

However, the total number of businesses in the region deemed to be in such a position remains above the national average.

Garry Lee, vice-chairman of R3’s southern committee, described the state of the retail sector as “encouraging” and said the positive sentiment reflects the wider economy.

The latest figures from the Office for National Statistics reveal that retail sales rose 1% in August and Mr Lee expects stores to perform well over Christmas, despite the prevalence of internet shopping.

He suggests that customers will look to avoid delivery issues by visiting stores to buy products in person, meaning retailers with physical premises stand to benefit.

The figures from R3, compiled using Bureau Cab Dijk’s Fame database, show that insolvency risk in the retail sector rose by 3% in September.

While the level of financial distress has stayed broadly the same, an estimated 7,330 of the 26,000 businesses in the South East are deemed to be above average risk.

This means around 28.3% of shops face a real threat of insolvency – above the national average of 26.5%.

Individuals taking part in a separate R3 study into personal debt also revealed rising concerns over credit cards – whereas 39% has worries over debt in June 2016, that figure now stands at 51%.

The ease of which purchases can now be made was a key part of the concerns, with users claiming it is difficult to track debt levels when they can spend freely.

R3 has warned businesses to keep a watchful eye on their finances and to plan for all possible eventualities, especially given current market uncertainty surrounding Brexit.

Those with concerns should see advice from a corporate insolvency practitioner as there could be a range of options available to assist their business.

By Phil Smith


If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1144.

View all Business Insights