Yahoo Finance Almost 44,000 UK retailers 'in real financial distress', experts warn
Almost 44,000 UK retailers are in real trouble and experts fear many could fold next year.
A worrying new report says thousands of chains, and individual shops and stores are showing signs of “significant financial distress”.
As Toys R Us faces up to possibly going into administration, putting 3,200 British jobs at risk, insolvency advisory company Begbies Traynor reports that the Black Friday boost to sales has not been sustained.
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“The increasingly frantic promotional and discounting activity we are seeing this week across the high street is simply not having the same effect on consumers as it once did,” said Julie Palmer, a retail expert at Begbies Traynor.
“UK shoppers are savvier than ever and prepared to search online for the best deals, having grown wise to the gimmicks and discounts on offer in store, which many now realise may not be as good as they first appear.”
Its report identifies 43,677 retailers facing a very difficult future. This is a 22% rise on December last year when 35,845 found themselves in a worrying position.
MORE: 3,200 jobs at Toys R Us in balance over £9m pension fund demand
Palmer added: “November’s interest rate decision, rising inflation, falling real wages, reduced credit availability and increasing Brexit uncertainty are all combining to put unprecedented strain on household budgets this Christmas season, pushing consumer confidence to an all-time low.”
The parent company of Toys R Us in America filed for Chapter 11 bankruptcy protection in September.
Now the future of the UK operation looks in doubt after the Pension Protection Fund said it could not support a rescue plan over here without a £9m injection into the firm’s pension scheme.
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If Toys R Us cannot reach a compromise on Thursday, then there are serious question marks over its 105 UK stores.
Dozens of Britain’s biggest High Street names have folded over recent years, including the likes of Woolworths, JJB Sports, Comet, Bhs, and Clinton Cards.
Most recently, Marks & Spencer has revealed it is accelerating plans to close 30 stores across the country as it fights to maintain a share of the tough retail market.
