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.
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.
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