Coronavirus

Study reveals areas hit hardest by Covid-induced retail insolvencies

The survey found that almost two thirds of North East businesses (64.3%) had seen turnovers fall during the lockdown – resulting in several job redundancies

Norwich has been revealed as the area hit hardest by Covid-induced retail insolvencies, according to a study by Wholesale Clearance.

It revealed that between March 2020 and September 2021 Norwich experienced 8.27 businesses shutting down out of every 100 and a total of 49 insolvencies.

It said that for Norwich, in particular, the need for additional support was “crucial” during the winter of 2020, when the area experienced a high volume of Covid cases and were put into Tier 4 – resulting in the closure of all non-essential stores.

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The second area hit hardest was Newcastle upon Tyne with 3.36 businesses shutting down out of every 100 and a total of 33 insolvencies filed.

It added Newcastle’s retail was the worst affected in the country according to an Office for National Statistics (ONS) survey from June 2020. The survey found that almost two thirds of North East businesses (64.3%) had seen turnovers fall during the lockdown – resulting in several job redundancies.

The North-East region of the UK had the highest unemployment rate (June 2020- June 2021) outside of London at 6.7%, with Newcastle’s rate one of the highest of all places mentioned at 7.7% – much higher than the average UK unemployment rate of five percent.

It added that not far behind was Southend-On-Sea at 2.9 businesses shutting down out of every 100, with a total of 25 insolvencies filed.

Nottingham and Sheffield complete the top five with 2.87 and 2.61 businesses shutting down out of every 100, and 35 and 55 total insolvencies filed, respectively.

According to statistics released in April 2021, 43,379 people had lost their job in retail as a result of the Covid-19 pandemic and insolvencies, with unemployment predicted to rise following the outbreak of the Omicron variant.

Karl Baxter, MD at Wholesale Clearance, said: “It’s disheartening to see the number of retail and wholesale businesses affected by the Covid-19 pandemic.

“With strict lockdowns forcing temporary closures and subsequent changes to guidelines, this has no doubt devastated a once thriving industry and put fear into once confident shoppers.”

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