Retail accounted for 14% of business administrations in the UK last year – approximately one in seven – new data from law firm Shakespeare Martineau has found.
According to the findings, some 237 retail businesses filed for administration in Britain during 2024, out of a total of 1,718 businesses overall. Retail accounted for the highest share on a sector-by-sector basis, followed by construction (184) and manufacturing (193).
Together, retail, construction, hospitality, manufacturing and real estate accounted for 55% of the total administrations last year, Shakespeare Martineau said.
'A Perfect Storm'
"In 2025, businesses across the UK will face an increasingly challenging environment, with a perfect storm of factors threatening to push more companies toward financial difficulty," commented Andy Taylor, partner and head of restructuring at Shakespeare Martineau. “Prolonged periods of difficult trading, exacerbated by geopolitical tensions and the impact of new tax burdens introduced in the latest budget, will intensify the pressures many businesses are already grappling with."
He added that the increase in national insurance contributions and lower threshold for payments will "stretch cash flows" for companies that are "already operating on razor-thin margins", such as those in labour-intensive sectors.
“Retail, hospitality and construction are particularly vulnerable as they often struggle to absorb rising overheads and additional costs," he noted.
On a regional basis, the lion's share of administrations took place in Greater London, accounting for 23% of the filings, followed by the North West (14%) and the South East (11%).
Rising Number
Administrations last year were not as high as the total recorded during the pre-COVID period – when 1,794 were recorded – however it's not far off, Taylor added.
"Many businesses are still dealing with the aftermath of the pandemic, inflationary costs and supply chain disruptions, which have left them more fragile and less able to weather the storm," he commented. “As we saw in 2024, sectors like retail, hospitality and manufacturing were hit hardest, and there is a real risk that without targeted support, more businesses will be forced to make difficult decisions, including cost-cutting measures, layoffs or even closure.
“These pressures are only compounded by the uncertainty in the global economy, which has already led to weakened consumer confidence and subdued spending. While many experts predict a potential easing of inflation in 2025, the overall landscape remains unpredictable."
