More than 35,000 retailers in financial distress as Omicron pressure mounts
More than 35,000 struggling retailers are now in significant financial distress as they face a harsh winter amid the spread of the Omicron variant of coronavirus, according to new figures.
New data from insolvency firm Begbies Traynor has also revealed that more than 20,000 bars and restaurants are also in a perilous financial position across the UK.
The figures come as firms across the UK witness reduced footfall and cancellations during a key trading period as coronavirus cases continue to soar past record levels.
The Chancellor Rishi Sunak announced a £1 billion package for affected firms earlier this week, focusing on the hospitality and leisure sectors, but industry leaders have already called for more to be done.
Begbies Traynor said its latest data for the final quarter of 2021 shows that 35,775 retailers, including both online and high street businesses, are considered in “significant financial distress”.
The figure represents an improvement on the fourth quarter of 2020, but also reflected a 2% increase in retailers facing financial difficulty against the third quarter of 2021 as inflation and supply issues continue to bite.
Julie Palmer, partner at Begbies Traynor, said: “2020 was one of the toughest years ever experienced in the retail sector.
“And while many sectors were hit hard, especially retail, they began to slowly recover in 2021 when restrictions were lifted, and retailers and non-essential businesses were able to reopen.”
Over the past quarter, across all sectors there were an extra 22,000 businesses facing financial difficulties, at 585,516, compared with the previous quarter.
The period saw 20,762 bars and restaurants in financial distress, while there were also 7,371 hotels and accommodation providers facing tough conditions.
Palmer added: “The hospitality sector had been brought to its knees by the Covid-19 restrictions, with many operators either having to shut or having to completely change their business models to handle successive lockdowns and the lack of trade.
“While many bars and restaurants and hotels have flourished since the summer as the UK has reopened, Omicron could be the straw that breaks the camel’s back and many now face the prospect of trading through what is typically the leanest part of the year with the double whammy of falling trade and very limited Government support.”