No Cause for Festive Cheer in November’s Insolvency Figures

A rise in the number of UK insolvencies from both the month prior, and the same period last year, continues a familiar tale of woe for British businesses. Neither Black Friday, nor the lead-up to Christmas has helped to spare struggling companies throughout the country.

The Insolvency Service’s monthly statistics on nationwide insolvencies revealed that 2,466 businesses were declared insolvent during November 2023. This breaks down into 359 compulsory liquidations, 133, administrations, 12 company voluntary agreements, and 1,962 creditors’ voluntary liquidations.

The total number of 2,466 insolvencies is a striking 21% higher than November 2022’s figures (2,032) and continues the trend of higher month-to-month figures in 2023 compared to the same period last year.

There was hope that drawing further into the ‘golden quarter’ of the year might turn around the fortunes of some businesses, particularly those in retail, but any upturn has failed to materialise yet. In fact, November’s figures show an increase in insolvencies from October (2,315). Of course, with the public prioritising their diminishing disposable income on festive-themed purchases, other industries are bound to suffer.

Those in sectors such as home improvement, gardening, and the pet industry typically see business start to slow toward Christmas, and there are also myriad office-based businesses that close up over the last few weeks of the year. Many of these firms can scarcely afford not to trade, but the lack of any custom over the period makes opening up and paying staff unprofitable.

Forbes Burton’s recently released distressed business list featured several November casualties, including big brands such as Pontins, Raleigh, and Carlsberg Marstons. Each of these had to scale back their operations by closing down well-established sites. Lloydspharmacy, meanwhile, closed the doors on the last of their branches in November, selling the majority of them to competitors.

Commenting on November’s insolvency figures, Rick Smith, Managing Director of Forbes Burton, mentioned that “these latest statistics provide little in the way of festive cheer for the UK’s struggling businesses. The rate of insolvencies has been relentless this year in the face of so many headwinds, and November has been no different”.

Looking forward, he added that “it remains to be seen if a Christmas surge of spending in December can buck the trend, but the early signs haven’t been particularly promising”.

A small silver lining can be found in Scotland’s performance over November, however, with an 8% lower number of insolvencies than November 2022 being recorded. 109 Scottish businesses were declared insolvent in total.

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