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Data recently released by the Insolvency Service has shown that insolvencies amongst retailers businesses have surged in the past year as the UK’s supply chain problems continue to worsen.
In the past 12 months, insolvencies of UK retailers have risen 21% from 827 in 2020/21 to 997 in 2021/22.
Problems created in supply chains by the war in Ukraine are likely to further exacerbate issues over the coming weeks, according to accountancy firm Mazars. The surge in gas and oil prices, also caused by the crisis, is expected to dent consumer spending in the retail sector.
Rebecca Dacre, partner in the restructuring team at Mazars, said: “Raw material costs for construction businesses have become a very significant problem over the last two years and the war in Ukraine has only worsened it.
“The predictions of a rise in insolvencies in the retail sector are now beginning to come true. Pressures have been rising for months and the dam now seems to be breaking. Retailers have faced a wide range of rising costs – staffing, energy, wholesale prices – just as Government support for businesses has been switched off. Some of them haven’t been able to survive that.”
