It is vital for many organisations that deal with retail firms to make effective use of credit management solutions, including credit insurance, at all times. However, given the tough economic conditions currently affecting the UK and many other countries around the world, this may be particularly the case now.
Indeed, figures released by Deloitte suggest that there was an increase in retail administrations last year. It revealed that whereas there were 165 such failures in 2010, this had risen to 183 in 2011.
Responding to the statistics, the British Retail Consortium (BRC) warned that more administrations are likely over coming months. One of the factors that may contribute to such problems is the scheduled rise in business rates of 5.6 per cent, which is due to take place in April.
Stephen Robertson, director general of the BRC, which is a trade association representing the whole range of retailers and describes itself as the “authoritative voice” of the industry, noted that 2011 was a “tough year” for retailers and there was “virtually no real growth” in the sector.
He added: “In such a competitive sector there will always be businesses that do well while others struggle, but seeing such a high number of failures in the final quarter of the year is particularly alarming.
“The next few months are bound to be quieter as consumers rein in spending after Christmas. Retailers are doing their bit by controlling their own costs and keeping prices down for customers despite steep increases in transport and utility bills.”
Mr Robertson went on to say that retailers deserve some help in overcoming the barriers to success that they are currently facing. He also noted that retail is the private sector’s biggest employer.
To help protect themselves from retail failures, companies may benefit from enhancing their credit management strategies and making sure they have the optimum level of credit insurance.
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