UK retailers could be facing a lean Christmas, if predictions that insolvencies and corporate failures will rise to 2008 levels over the holiday period prove to be true.
Figures from financial services firm, Deloitte, showed that 111 UK retailers entered administration or receivership in the fourth quarter of 2008, falling to 47 and 44 in the same periods in 2009 and 2010 respectively. A number of high profile stumblings in recent months, however – including Best Buy pulling of the UK and Comet being sold for just £2 – have led to economists predicting a hard Christmas.
Ernst & Young's global head of restructuring, Alan Bloom, said, "There are always retailers that go bust over Christmas, but there may be more than usual this year. And retailers are often big employers, so it will be painful."
Retail consultancy, Conlumino, has forecast that British people will spend around £200 million less in December this year – but said that they could rein in their spending even further.
Conlumino's managing director, Neil Saunders, said that the country is likely facing a very bleak start to 2012. Many non-food retailers depend on the Christmas period for around half of their annual profits, and this year's cutting back is likely to break many of them.