Almost 500,000 UK businesses are said to be in “significant” financial distress – the highest number for 16 years.
Research from corporate restructuring firm Begbies Traynor found that 494,000 businesses reported significant financial concerns at the end of December 2019, a rise of 81% since the start of 2016. Young businesses, founded after 2014, were shown to be the most vulnerable in the research.
In the fourth quarter of 2019 there was an 2% year on year increase in retail businesses reporting financial distress – totalling 31,615.
Online retailers are also facing troubling times, with an 8% year on year increase to 9,117 online businesses now in significant distress.
Julie Palmer, partner at Begbies Traynor, noted that the figures reflect a shifting consumer world. “The landscape of UK business is slowly changing. In order to capture the attention of consumers, businesses need to demonstrate that they not only have a compelling product or service at the right price, but also one that has strong environmental credentials to boot.”
She continued: “The modern consumer in the UK is increasingly being motivated by impact on the planet, and so the appeal of fast-fashion, like the Boohoo and Primark models could fall from favour in 2020. The key for businesses will be to keep up with this trend and understand the modern demands of the consumer.”