New government figures have revealed a 90% increase in retailers entering liquidation and a 47% increase in transport and warehousing companies going bankrupt in 2022, with ParcelHero warning that the first half of 2023 could be equally challenging.
A government company insolvency report showed that UK businesses failed at their fastest rate since the 2008 financial crisis, with bankruptcies rising 30% over 2021. Both the retail and transport & storage sectors were badly hit.
A total of 3,263 retailers and wholesalers entered liquidation in 2022, a jump from 1,722 retail insolvencies in 2021. It included big name stores such as M&Co, Joules, Made.com, Missguided, McColl’s, Sofa Workshop and T M Lewin. Some have now been acquired by other high street giants.
In the transport & storage sector – 782 companies went bankrupt last year, a rise on the previous year’s 532.
ParcelHero warned that if Paperchase are anything to go by, 2023 could be equally bruising.
“Certainly, for the first half of this year, it will be hard to spot any “green shoots”. The International Monetary Fund has given a gloomy outlook for the UK, predicting that Britain will be the only major economy to shrink in 2023” said David Jinks, ParcelHero’s head of consumer research.
Jinks hoped that “surviving retail and supply chain companies have learned to adapt to challenging market conditions”. And predicted that not as many companies will fail in 2023.
He stressed that retailers will still face issues with their international delivery partners over calculating volumetric weight.
“It’s an ongoing issue that needs to be resolved before British companies can make the best of overseas sales opportunities. Global carriers charge based on the combined size and weight of a shipment, using a formula called volumetric weight,” he explained.
“To add to the confusion, each carrier uses different criteria to calculate this weight, depending on which service is selected. This leads to excess carrier charges for retailers and unwanted disputes between couriers and their retail customers.”
Jinks recommended retailers use volumetric weight tools to calculate typical volumetric weight and also works out the actual weight the specific carrier and service will bill against.