East of England market stalls among top UK retail performers – R3 Eastern report
East of England stall holders and market retailers are outperforming the majority of their national counterparts as new research reveals that they are among the most financially stable in their specialism in the UK.
March retail figures compiled by insolvency and restructuring body R3’s Eastern branch, using Bureau Van Dijk’s Fame database, show that fewer than one-in-three – 30.8% – in the region are at higher than normal risk of insolvency, which is one of the lowest percentages in the UK. Northern Ireland has the highest proportion of stall and market retailers at elevated risk of insolvency with 43.2% – which is almost eleven percentage points higher than the UK average of 32.6% – while Scotland has the lowest at 25.4%.
In contrast, the news is less positive for East of England booksellers, with more of the region’s retailers at above average risk of insolvency than many of their UK regional counterparts. Around two-in-five local companies – 44.6% – are at higher than normal risk of insolvency, which is almost eight percentage points above the UK average of 36.2%, but below the North East statistic of 64%.
Looking at the retail sector as a whole, R3’s research indicates that around one-in-three East of England retailers – 35.2% – have an elevated insolvency risk, equating to 16,796 local businesses. This is a notable increase on the statistics from six months previously when, in September 2017, the proportion was one-in-four, or 27.3%, representing 15,616 local companies.
Commenting on the research, R3 Eastern Chair Mark Upton, a partner at Ensors Chartered Accountants in Bury St Edmunds, said: “The retail sector has suffered some high profile casualties in the last few months, and there are many more still struggling. Recent administrations have included Maplin, New Look and the UK arm of Toys R Us, while profit warnings have come from other household-name businesses such as Debenhams and Mothercare.
“Here in the East of England, the percentage of retail firms at greater than usual risk of insolvency was higher in March this year than at any point in 2017. Surging inflation and rising fixed costs – including higher business rates and increases in the National Minimum and Living Wage – have added greatly to the financial pressure faced by local retailers.
“There are glimmers of hope, however, as retailers such as Aldi, Lidl, Oliver Bonas and Primark continue to invest in new store openings, and the wider retail sector embraces the internet as a key factor in supporting and driving retail sales.
“For those retailers who continue to struggle, it is important to note that there are always several rescue and recovery options available. Timing, however, is critical. The sooner expert advice is sought from a regulated insolvency or restructuring professional, the more can be done to provide the best possible outcome.”