As we approach the third anniversary of the first lockdowns in the UK, we’re still experiencing the ripple effects from the pandemic, further impacted by the cost of living crisis, inflation, and rising energy costs. Is there any positive news to come out of next weeks Budget? Who knows. The fact remains there’s still some key sectors which aren’t out of the woods yet. Let’s explore them further.

Restaurants

These companies have really struggled, and the impact is reflected in the insolvency statistics. According to data from Mazars, the previous three quarters (Q2, Q3 and Q4 of 2022) have seen the highest number of insolvencies recorded to date – 396, 453, 504 respectively.

As we shared in our previous blog, there were a lot of bets placed on Christmas 2022 turning around the fortune of restaurateurs. However, train staff had other ideas voting for strike action which took place ahead of the key Christmas party trade dates.

In April we’ll understand the exact impact of these events when the Q1 2023 insolvency stats are released.

At TruSolv, we managed the insolvency process for a number of restaurants last year though 2023 has been quieter. That said, there’s been a number of popular restaurants in Southampton which closed already this year including Kuti’s Brasserie.

Retailers

As disposable income continues to be squeezed, retailers will feel the impact. Unlike the hospitality sector, Christmas spending at retailers was good. But after that festive spending, reality has kicked in and people need to cut back on non-essentials.

The Centre for Retail Research recently reported that in January 2023 alone, seven UK retailers failed. This impacts 361 stores and potentially puts 3,215 jobs at risk.

Rent, utilities, and increased supplier costs are all having a very real impact on retailers of all sizes. It might be the large chains that get the headlines, but the independents are also suffering.   

Construction

The construction sector contributed the largest amount of company insolvencies across England and Wales in the first half of 2022 – 2,083 which was 20% of company insolvencies overall. There were 1,044 insolvencies in Q1 2022, the highest amount in 10 years.

Research from Red Flag estimated the construction sector could reach 6,000 company insolvencies in 2023. As well as increased material costs, energy costs and ongoing supply chain challenges, construction companies are carrying bad debt to the tune of £300m at the start of the year.

Our experience is there aren’t many weeks (or days!) that pass without speaking to someone in or effected by the construction industry.

Whichever sector you’re in, we’re here to help

Although we’ve highlighted a few sectors above, all types of companies are struggling. No two days are the same for us which is why it’s so important to get qualified advice from an insolvency professional. Your company may be suffering the same macro pressures but the numbers within your business might be totally different.

There is no “one-size-fits-all” when it comes to insolvency advice. Pick up the phone and tell us about your circumstances and we’ll give you advice tailored to you. Call 0808 196 8676 or email help@trusolv.co.uk