More than 35,000 retailers in financial trouble as Omicron pressure mounts

More than 35,000 struggling retailers are now in deep financial trouble as they face a harsh winter amid the spread of the Omicron variant of the coronavirus, according to new figures.

New data from insolvency firm Begbies Traynor has also revealed that more than 20,000 bars and restaurants are also in dire financial straits across the UK.

The figures come as businesses across the UK see reduced attendance and cancellations during a key business period as coronavirus cases continue to climb past record highs.

Chancellor Rishi Sunak announced a £1billion package for affected businesses earlier this week, focusing on the hospitality and leisure sectors, but industry leaders have already called for more to be do.

Begbies Traynor said its latest data for the last quarter of 2021 shows 35,775 retailers, including online and street businesses, are considered to be in “significant financial distress“.

The figure represents an improvement from the fourth quarter of 2020, but also reflects a 2% increase in the number of retailers facing financial difficulties compared to the third quarter of 2021, as inflation and supply problems continue to escalate. to make felt.

Julie Palmer, Partner at Begbies Traynor, said: “2020 has been one of the toughest years ever in the retail industry.

“And while many sectors have been hit hard, particularly retail, they have started to slowly recover in 2021 as restrictions were lifted and retailers and non-essential businesses were able to reopen.”

During the last quarter, all sectors combined, an additional 22,000 companies faced financial difficulties, or 585,516, compared to the previous quarter.

The period saw 20,762 bars and restaurants in financial difficulty, while 7,371 hotels and accommodation providers also faced difficult conditions.

Ms Palmer added: “The hospitality sector has been brought to its knees by Covid-19 restrictions, with many operators having to either shut down or completely change their business models to deal with successive lockdowns and lack of trade.

“While many bars, restaurants and hotels have flourished since the summer with the UK reopening, Omicron could be the straw that breaks the camel’s back and many are now faced with the prospect of negotiating for what is usually the leanest part of the year with the double damage of falling trade and very limited government support.

Sarah J. Greer