The number of retailers going under jumped almost 50 per cent in the first three months of this year, it has been revealed.
There were 327 retail failures recorded in the first quarter of 2018, according to data compiled by credit checking agency Creditsafe.
The firm said Toys R Us and Maplin were the two largest firms to go into administration in February, after being hit by weak consumer spending and online rivals.
Shutting up shop: There were 327 retail failures recorded in the first quarter of 2018, according to data compiled by credit checking agency Creditsafe
Employment levels in the retail sector are down almost 13 per cent year-on-year.
Chris Robertson, UK CEO at Creditsafe, said: ‘The first quarter of 2018 proved to be very turbulent for the retail sector, with a staggering rise in the number of company failures and a fall in employment.
Most notably it was clear that high street chains like Toys R Us, Maplin and Carpetright struggled to adapt to the changing nature of the market. It seems this challenge is ongoing with the likes of House of Fraser’s parent group reporting a £44 million loss only this month.
‘Worryingly, the level of bad debt owed by the sector to suppliers has more than doubled since the previous quarter, suggesting smaller businesses down the supply chain are having to take on a hefty chunk of the financial burden. We have to hope this doesn’t lead to a chain reaction of failures.’
Official figures this week are set to show retail sales recovered slightly from a 1.2 per cent dip last month, rising by 0.9 per cent. But consultancy Capital Economics said the annual rate of growth is likely to have fallen to just 0.2 per cent.