Retail failure rate stays steady, but economic and geopolitical uncertainty could spell danger ahead

Today’s company insolvency statistics shows that retail trade insolvencies were up 3% from the previous month (165) and down 10% year-on-year from 184 in April 2024. Retail insolvencies were also down 15% from 2,212 in the 12 months to April 2024 to 1,889 in the twelve months to April 2025.

Gordon Thomson, Restructuring Partner at leading audit, tax and consulting firm RSM UK, said: “These latest figures show a marginal uptick month on month, but figures overall indicate that retail distress is holding steady. This is encouraging, and further evidence that most retailers are continuing to show operational resilience in a challenging trading environment. But looking ahead, the picture isn’t looking as rosy as some might hope. Today’s retail sales figures were reported as ‘dismal’ following a tough April that saw discretionary budgets squeezed by rising household bills. This downturn in trade, combined with inflationary pressures and global economic and geopolitical uncertainty means we will likely see a return to higher levels of insolvencies.

“Longer term, retail operations will also face the added pressures of increased business rates, tax rises, and regulatory burden. With this in mind businesses will need to plan for the associated cost-pressures to follow to help them react to the inevitable headwinds.

“On the flipside, consumer confidence continued to hold steady and if the hotter and sunnier weather we’re seeing now continues, alongside a continued and steady reduction in interest rates, it’s hoped we’ll start to see these favourable indicators translate into increased spending. The concern will be if inflation persists as this may delay any meaningful uptick in consumer confidence and spending.”