The retail industry showed healthy signs of resurgence in 2010, with a dramatic drop in the number of companies falling into administration.
According to research by business advisory firm Deloitte, the retail sector suffered 43% fewer administrations last year – 165 compared with 290 in 2009.
However, 44 retailers went into administration in the fourth quarter, an increase of 26% on the 35 administrations in the previous quarter. And Deloitte predicts that the pressure will continue into the new year.
Lee Manning, reorganisation services partner at the firm, commented: “Whilst these figures will no doubt bring a glimmer of hope to the retail sector, we will undoubtedly see a growing number of retailers struggle to cope in the first few months of 2011 as they buckle under the pressure of government spending cuts and the increase in VAT, which will see consumers cut back on spending in an attempt to make ends meet.”
The total number of companies falling into administration in 2010 declined 35% from 3,188 in 2009 to 2,086, with the last quarter seeing a drop of 6% on the previous quarter.
The property and construction sector took the worst hammering during the year, with 21% of the total number of administrations.