The food and drink industry accounted for 6% of administrations in the UK last year, new data from law firm Shakespeare Martineau has found.
Of the 1,340 businesses that filed for administration in 2022, some 87 hailed from the food and drink industry, including breweries and restaurant chains.
This marked a 56% increase compared to the previous year.
The sectors worst hit by administrations were construction (208 filings), manufacturing (174), and retail (138), accounting for 39% of the total, Shakespeare Martineau said.
On a geographical basis, Greater London accounted for the most filings (20%), followed by the South East and North West (16% each).
'Pulled In Every Direction'
“Numerous headwinds – such as the cost of borrowing, and increasing energy, fuel and raw material costs – have become a new normal at this point and businesses are being pulled from every direction," commented Andy Taylor, partner and head of restructuring at Shakespeare Martineau. "Furthermore, while supportive in the main, pressure from lenders is increasing and HMRC is taking a firmer stance, seeking to cap levels of liability for non-payment of tax.
“While the UK is perilously close to recessional phase, businesses must have a clear focus on cash flow and look to save costs where possible. Directors must continue to plan strategically for the ever higher costs of ‘doing business."
The data showed that while the number of administrations is yet to reach pre-pandemic levels, financial pressures on households and businesses, as well as fears over a recession, mean that the worst could still be yet to come.
“If things continue as they are, we expect to see an increase in businesses failures as they battle tough trading conditions," Taylor added.
"However, resilient businesses with a strong balance sheet and with the right planning and oversight in place, may find opportunities for growth as we head further into 2023.”
© 2023 European Supermarket Magazine – your source for the latest A-brand news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.