Monday, 25 July 2011 at 10:20, Reuters, London
More retailers are seen entering administration as consumer spending dwindles. (REUTERS)
The number of British retailers falling into administration rose eight per cent in the second quarter on a year ago and will continue climbing as consumers are squeezed by rising prices and government cut backs, consultants Deloitte said.
Some 43 retailers, including wine chain Oddbins, home improvements group Focus DIY and fashion chain Jane Norman, entered administration - a form of protection from creditors - in the March-June quarter, Deloitte said on Monday.
"It is likely that consumer spending will continue to decline this year, as concerns continue to grow around high inflation, unemployment and reduced disposable income," said Lee Manning, restructuring partner at Deloitte.
"It is difficult to see where the positive growth will come from in the next few months. Inflation has hit retailers hard in the second quarter and unfortunately we are likely to see retail administrations increase as the year goes on."
Analysts expect the next pinch point for retail failures to be at the end of September, when fourth-quarter rents become due. At that point, many retailers have their worst cash position of the year, having committed to stock for Christmas.
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