The number of administrations in the hospitality and leisure sector fell the sharpest out of all industries in 2012, with a 21% decline from 216 to 171, according to new research from Deloitte.
It compares to a 6% rise in insolvencies in the retail sector (194) following the collapse of a number of high-profile high street firms such as Comet, JJB Sports and Clinton Cards. However, there was a slight fall in retail insolvencies the last three months of the year compared to the fourth quarter of 2011 (37 versus 42).
In total, 1,833 businesses went into administration in 2012, compared with 2,010 last year, a fall of 9%.
Lee Manning, restructuring services partner at Deloitte, said: “These figures are a stark reminder of the difficulties which continue to face the high street. Constrained household budgets and the structural challenges facing the sector mean it is certain that we will see further distress next year. Christmas trading appears to have been reasonable, though not spectacular and not enough to prevent insolvencies in the first quarter of 2013.
“It is also notable that high profile, nationwide chains continue to be among the casualties despite the shake-up seen in the sector since 2008. This year alone we have seen Peacocks, La Senza, Blacks, Game, Clinton Cards, JJB Sports and Comet enter administration.
“Consumer confidence remains fragile and where we have seen some respite through lower inflation, this has not translated into increased spending with many consumers preferring to pay down existing debt or save. Strong consumer spending growth is not likely to return any time soon which makes it essential that retailers address the fundamental issues affecting the industry - store portfolios and multichannel.
“There will always be a need for physical retail space but at present, too many retailers have too many stores and 2013 is likely to be marked by further closure programmes, both within and outside of formal insolvency processes. Similarly, as an increasing proportion of retail sales move to online and mobile, retailers need to consider how their stores support sales across all channels by offering flexible delivery or collection options, becoming a product showroom and developing brand engagement and loyalty.”
Almost all sectors saw a decline in the number of business failures this year. For example, there was a 9% decline among manufacturing businesses and 7% among constructions. Outside of retail, only financial services and the mining & energy sectors saw notable increases (47 versus 30, and 28 versus 22 respectively).
