Shops are critical and not just because you buy from them
When Napoleon labelled England as “a nation of shopkeepers” it was widely taken to be an attempt at an insult.
Compared to the influence of the military on French society, one that based its strength on trading and mercantile expansion across the globe was seen as weaker and lacking in the same martial splendour.
What quickly became apparent once the money started rolling in and the British Empire was then able to use it to overcome one of the best Generals in history, was that commerce and retail would broadly be the template for growth for everyone else.
More than 200 years later and retail is firmly secured as the most important barometer of the health of the UK economy.
Despite having a wealth of research and statistics available, for a lot of people, the health of the economy can be measured through a quick trip down to the shops.
How busy are they? How well stocked are they? What quality stock do they have in? What shortages are noticeable? What are the prices like? Is there much competition? Are all the shop units themselves fully occupied or are there spaces?
A high street is not so much a barometer as a thermometer for our economic health and wellbeing and after taking the readings from 2022, it might be time to reach for the paracetamol.
After two years of pandemic and lockdowns, 2022 saw the retail and wholesale sector have the second largest number of insolvencies after construction.
The latest official figures provided by The Insolvency Service show that there were 1,802 insolvencies in 2022, which is nearly double compared to the previous 12 months.
Total Retail insolvencies (2019-2022)
|Number of insolvencies
We won’t have the official figures for the first quarter of 2023 until next month but new research shows that sentiment among retailers remains negative.
One in five (22%) of retailers questioned are not confident of being able to continue trading through to the end of 2023.
250 large and mid-sized retailers across the UK were asked for their opinions on their current and projected trading plans and the answers highlighted some of the significant concerns the sector is facing.
60% of retailers polled said that one of the biggest challenges they faced was the rise in energy costs impacting on their profit margins.
A third of participants were eager to see the government increase, not maintain, energy support into the new tax year while 22% of respondents feared that if the government continued with its plan to reduce relief on energy bills from April onwards, the likelihood of going into insolvency this year would be high.
2022 also saw a rise in operating costs for two thirds of retailers, including on labour, rent, transportation and wholesale costs.
Energy is still the most concerning factor for retailers over the next 12 months with over half of those polled saying it was the biggest pressure on their margins, even with government support.
In an attempt to put themselves in a better position many retailers are using a variety of initiatives to improve their cash position including changing their commercial energy supplier as well as passing on general cost increases to their customers
With 72% of retailers expecting creditor pressure this year, it may be time to consider what options are available to you to protect the future of your business.
One of our expert advisors will work with you to better understand your individual needs and situation and what options you have available to improve your position.
They will let you know how you can implement them as quickly and efficiently as you can.
2023 could still be a year of real recovery and growth – but only if you make the right choices now.