Almost half a million UK businesses are struggling, reports show
Wednesday, 29th January 2020 13:13

A recent report from insolvency practice Begbies Traynor shows that nearly 500,000 UK businesses are struggling – the highest figure on record. Experts predict that this will rise to over half a million in 2020.

The data was collected from 22 sectors, with 15 of those found to have serious financial woes – most notably in Q3 and 4 of 2019. Figures from the same period for 2018 show that only 13 sectors were under financial pressure.

It’s no surprise that many of these sectors cited Brexit as having a negative impact on business performance. Uncertainty about the economy and trading post Brexit has prevented further business investment or growth. However, with a clearer Brexit strategy hopefully now in place, there is a sense of optimism that business will recover.

Property, construction, retail and support services were particularly affected with the property sector disclosing a 13% increase (the highest year o year leap for any sector) in companies who were struggling. And in contrast to previous years, it wasn’t just high street retailers who struggled; online retailers also experienced an 8% rise in those in financial distress. This is a sector that has previously held its nerve during turbulent times.

But it’s not just Brexit that has cast a shadow over businesses; the report concluded that consumers are now much savvier about where they place their business. It is no longer enough to have a standout product, solid customer service at the correct price point; consumers are now looking beyond USPs and taking a closer look at sustainability credentials. Predictions are that fast fashion and food business models will experience a drop in sales due to their impact on the environment. Businesses need to keep up with trends and understand consumer moods and demands if they want to avoid a downward turn in 2020.

To check the stability of any UK business, use identeco’s Business Support Toolkit company search function. The portal gives an at-a-glance financial health rating as well as detailed company and financial reports. For more details, click here or email our team