Business failure rates falling, says Deloitte

The number of retailers who went out of business fell overall by 6% in 2013, but there was an increase in retail administrations in the run-up to Christmas, according to analysis by Deloitte.

The firm says 183 retailers entered administration in 2013, compared with 194 in 2012 and 183 in 2011. However, there was an increase of 11% in the last three months of the year which saw 41 administrations compared to 37 in Q4 2012.

Lee Manning, restructuring services partner at Deloitte, said: 'The high street has undergone a re-balancing, and this is what is being reflected by these figures. A year ago we were about to see HMV, Blockbuster and Jessops enter administration, but I would not expect as many high profile retail casualties this time round.'

In total, 1629 businesses went into administration in 2013, compared with 1,833 last year, a fall of 11%. Deloitte says almost all sectors saw a decline in the number of business failures, including sectors most affected by the economic difficulties of the past five years.

There was a 17.5% decrease in administrations in the hospitality and leisure sector (141 versus 171), a 4% decrease in manufacturing administrations (273 vs 284) and a 24% decrease in property and construction administrations, down to 322. Outside of retail, only the healthcare and social services sector saw an increase in administrations of 7% to 45 businesses.

Manning said: 'What's most notable is the decline of administrations in the property and construction industry. This is a significant reduction and reflects the recovering health of the sector. This drop has, unsurprisingly, had a positive knock-on effect for the hospitality and leisure sector, which has also seen a decrease in administrations.'

Pat Sweet | Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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