Some positive news as the Golden Quarter arrives: UK retail trade insolvencies fell 7% to 171 in August from the previous month (184). Not so positive is that trade insolvencies did rise 25% year-on-year from 137 in August 2024.
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The figures come from audit, tax and consulting firm RSM UK, which said the summer holiday’s trading uplift was supported by better weather and back to school “derailing the uptick in insolvencies seen in July”.
Gordon Thomson, restructuring partner at RSM UK, added: “On the surface [the latest August findings] are positive, but some struggling retailers could be hanging on to see what the Golden Quarter brings to turn the tide of distress.”
He said: “The first half of the year showed encouraging signs of an uptick in consumer spending, but the second half of the year brings higher inflation and Budget uncertainty, which has the possibility to suppress consumer confidence. This could put the brakes on spending, as seen in the second half of 2024, so retailers could be entering a more challenging trading period.
“One silver lining is that consumers have been saving to make the most of higher interest rates so they may choose to dip into these savings to bolster discretionary spending during the Golden Quarter.
“If the Budget avoids hitting people’s pockets, bolsters retail investment to support growth and doesn’t spike inflation any further, then we could see a boost to consumer confidence at just the right time.”
