Retail Accounted For 10% of UK Administrations

The retail sector accounted for 10% of administrations in 2022 – the third highest industry in the UK – according to analysis by full-service law firm Shakespeare Martineau.

A total of 1,340 businesses, 138 of which came from the retail industry, filed for administration last year, marking a 56% increase compared to 2021.

Construction, manufacturing and retail were the sectors worst hit, accounting for 39% of administrations. Greater London led the way with 20% of the filings, followed by the South East and North West (16% each), data from The Gazette Official Public Record has revealed.

While January (55) was the quietest month, administration numbers leapt to 160 in November – the most recorded for 28 months – before dipping to 120, 93 and 104 in April, May and June respectively.

And while administrations are still yet to hit pre-Covid levels (1,794 in 2019), recession fears and the financial pressure on households and businesses means the worst is still yet to come, an insolvency and restructuring expert has warned.

UK Administrations

Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “The latest statistics show that the true costs of living and doing business are beginning to bite.

“Numerous headwinds – such as the cost of borrowing, and increasing energy, fuel and raw material costs – have become a new normal at this point and businesses are being pulled from every direction. Furthermore, while supportive in the main, pressure from lenders is increasing and HMRC is taking a firmer stance, seeking to cap levels of liability for non-payment of tax.

“While the UK is perilously close to recessional phase, businesses must have a clear focus on cash flow and look to save costs where possible. Directors must continue to plan strategically for the ever higher costs of ‘doing business’.

“For businesses to survive longer term, they will need to act now to address underlying issues. I cannot overstate how important it is to get to grips with matters at the earliest possible juncture and to take the appropriate professional advice, if needed. Taking a proactive approach will provide options and help to keep businesses afloat.

“If things continue as they are, we expect to see an increase in businesses failures as they battle tough trading conditions. However, resilient businesses with a strong balance sheet and with the right planning and oversight in place, may well find opportunities for growth as we head further into 2023.”

Companies Filing For Administration in 2022
By sector By region
Construction 208 Greater London 265
Manufacturing 174 South East 213
Retail 138 North West 212
Real estate 95 Yorkshire & The Humber 135
Professional services 90 West Midlands 101
Food and drink 87 East of England 94
Financial 79 East Midlands 74
Health and social 66 South West 68
Utilities 61 Scotland 59
Automotive/transportation 60 North East 50
Information and communication 55 Wales 48
Hospitality 53 Northern Ireland 18
Others 51 British Isles 3
Engineering 35    
Administrative 24    
Arts and entertainment 21    
Logistics 12    
Agriculture 10    
Mining and quarrying 10    
Public admin and defence 7    
Education 4