17 January 2025
Hospitality accounted for 10% of UK administrations in 2024, the fourth highest sector in the UK, with retail also among the worst-hit industries last year, according to new analysis.
The research, published by law firm Shakespeare Martineau, reveals that the two sectors, alongside construction, manufacturing, and real estate, made up 55% of the 1,718 administrations last year, with these sectors forming the top five for the second year in a row.
Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “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. The increase in national insurance contributions, coupled with the lower threshold for payments, will stretch cash flows for companies that are already operating on razor-thin margins.
“Labour-intensive sectors, such as retail, hospitality, and construction are particularly vulnerable as they often struggle to absorb rising overheads and additional costs…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.”
Andrew Goodacre, CEO of Bira, said: “This research confirms what we have been seeing. Independent high street businesses are under immense strain, with a difficult economic climate coupled with growing tax burdens are combining to create an incredibly challenging environment.
“Without urgent measures to support these businesses, we risk losing the unique character and diversity that independents bring to our high streets. Action is needed now to ensure their survival in 2025 and beyond.”
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