In the final few trading days before Christmas, thousands of UK retailers are continuing to slash prices in a bid to turn around their fortunes ahead of the upcoming Quarterly Rent Day after another year of challenging festive trading a specialist says.
According to new data from business recovery practice Begbies Traynor, UK retailers have experienced another weak Christmas trading period this year, with 21,802 retailers across the country now suffering from ‘Significant’ financial distress.
It said that was six percent higher than at this stage last year. Although a recent report from the Office for National Statistics showed that retail sales grew in November. Begbies Traynor warned that, despite recent sales growth, prolonged discounting, miniscule margins and higher staff and input costs due to the new, higher national living wage and sterling’s weakness mean many retailers are being pushed to breaking point.
Worryingly, the research also shows that of the 21,802 retailers currently in a state of ‘“significant” financial distress, 97 per cent (21,150) were small and medium sized businesses, indicating the challenges faced by smaller, independent retailers who lack the marketing budgets and economies of scale of their larger rivals.
Julie Palmer, (pictured) partner at Begbies Traynor, said: “Retailers were hopeful that 2016 would be a bumper year for Christmas sales, after reports that credit card debts hit a record high in October as consumers beat the Brexit blues through a spot of retail therapy.
“But with rising transport and fuel costs continuing to drive up the cost of living, it seems that this momentum has not continued into the festive period, with levels of financial distress among retailers now even higher than last year.”