Despite these failures, figures from the quarterly Watchdog report reveal the Retail sector saw an overall drop in company failures with 61 fewer companies going into administration in the last three months compared to Q2 2018, a fall of 14.7%.
The number of employees working in the UK retail sector also showed signs of growth, with 352,898 people joining the sector’s payroll, an increase of 13.8% on the previous quarter. Major food retailers Sainsbury’s, Tesco and Morrisons all featured in the fastest growing companies list for the quarter, pushing Asda off the top spot it had held in Q2 of this year.
“The latest Watchdog snapshot for the retail sector comes right before the important autumn and winter shopping periods, which are vital for industry profits,” said Chris Robertson, UK CEO at Creditsafe. “Black Friday and the Cyber Weekend in late November are key for lifting profits.”
“We’re seeing that while retailers have been hit hard by a combination of issues this year and some notable collapses, the spending power of the UK consumer remains, and the sector overall is pulling through.”
The Watchdog report, which analyses financial data across 12* UK business sectors, found the Retail sector’s bad debt had also fallen over the last three months. Significantly, bad debt owed to the sector fell by 96.1% from £53.6m to £2.1m, the lowest recorded for the year to date.
* Farming and Agriculture, Construction, Banking and Financial, Hospitality, IT, Manufacturing, Professional Services, Retail, Sports & Entertainment, Utilities, Transport and Wholesale.