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1,300 insolvent retailers in 2013 17 June 2014

The number of retailers entering insolvency reached a five-year high in 2013, according to research from accountancy firm Wilkins Kennedy.

In the 12 months ending 31 March 2014, 1,287 retail businesses entered insolvency, up 12% on the 1,149 figure one year previously.

Wilkins Kennedy said that while “bricks and mortar” retailers were squeezed by ecommerce players, there have been particular issues amongst small independent convenience stores.

Anthony Cork, partner at Wilkins Kennedy, explained: “The supermarkets have the financial power to snap up the best small, inner city locations with heavy footfall, and due to their scale can price very aggressively against convenience stores.

“Unfortunately, many independent convenience stores struggle to match the quality of product of bigger retailers because they lack the scale of purchasing and logistics.

“Whilst the boom in the housing market and the overall recovery is helping big ticket retailers and DIY shops it does less to help the typical small-scale food and drink retailers.”

The firm also warned that a “price war” between the big supermarket players in response to “foreign owned, deep discount” groups, could see further woes for independent convenience stores.

However, there may be some respite for retailers as the research also found that lending to the retail sector totalled £17bn in March 2014, up from a low of £15.5bn in August 2013 and representing the highest figure in 27 months since November 2011.

Cork said: “Even though overall lending is decreasing, retailers’ access to funding is on the up, this is great news for the sector which needs all the support it can get.

“After so many high-profile insolvencies, we hope that the increased lending will give the sector a much-needed boost. Unfortunately banks will be less inclined to lend to smaller retailers.”

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