The retail sector accounted for 10% of administrations in the first six months of the year – the third highest industry in the UK – according to analysis by full-service law firm Shakespeare Martineau.
It found more than 620 businesses, 62 of which came from the retail industry, filed for administration between 1 January and 30 June 2022, marking a 60% increase compared to 2021.
The data from The Gazette Official Public Record revealed construction, manufacturing and retail were the sectors worst hit, accounting for 40% of administrations. Greater London led the way with 22% of the filings, followed by the South East (17%) and North West (15%).
It added that while administrations nationally are still yet to hit pre-Covid levels (940 in the first six months of 2019), recession fears and the financial pressure on households and businesses means “the worst is still yet to come”.
Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “Administrations were suppressed during Covid due to the introduction of numerous measures, such as the Coronavirus Business Interruption Loan Scheme, the subsequent Recovery Loan Scheme and a general prohibition on many forms of enforcement.
“As those support packages have been removed, we have seen an increase in insolvencies generally, which is to be expected.”
He added: “Businesses are facing numerous headwinds – from inflation and interest rises to the challenging political landscape at home and further afield. There are a lot of businesses with endemic problems they have been sitting on for months and, in some cases, years. If things continue as they are, we expect to see an increase in businesses failures as they attempt to address their underlying issues and battle tough trading conditions.”