Business failures in the retail and wholesale sector are predicted to increase by 26 per cent this year compared to 2008, according to the latest figures from accountant and business advisor BDO Stoy Hayward.
It predicts that 3,800 - or one in 100 - UK retailers will go out of business by the end of 2009. This precedes an even more pessimistic outlook for 2010, when the report estimates a 55 per cent rise in retail and wholesale failures to 5,800 - or 1.6 per cent of all retail and wholesale businesses.
Despite this, business failures in the retail and wholesale sector to date have held-up far better than those in other industries, according to the report. With a one per cent business failure rate, the sector has the least amount of businesses expected to fail. Businesses in the construction and real estate sector top the list of failure rates with 3.2 per cent of businesses collapsing, followed by manufacturing where 2.3 per cent of all businesses are expected to go under.
Tony Nygate, business restructuring partner and retail specialist at BDO Stoy Hayward, said:
“Despite a pessimistic outlook, it is encouraging to see that retail and wholesale spending has not fallen off a cliff although many businesses in the sector clearly have seen a decline in their revenue.”