Retailers and their delivery partners had a grim 2022. A new Government company insolvency report reveals that, compared to the previous year, there was a 90% increase in retail failures and a nearly 50% increase in the number of freight and supply chain firms going bankrupt.
The home delivery expert ParcelHero says that 2022 was a brutal year for retailers and their supporting supply chain organisations. It warns that, if the fate of Paperchase is anything to go by, the first half of 2023 could be equally bruising.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The ending of the Government’s Covid support, soaring inflation, rising household bills and the ongoing impact of Brexit combined to make 2022 a torrid year for retailers, their courier partners and everyone involved in the supply chain.
‘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. Big name stores falling into administration included M&Co, Joules, Made.com, Missguided, McColl’s, Sofa Workshop and T M Lewin, although a few of these companies were later bought out of administration. That’s significantly higher than 2021’s 1,722 retail insolvencies.
‘In the transport & storage sector, 782 companies failed last year, a sharp rise on the previous year’s 532.
‘Drilling down into the Government’s new figures reveals exactly which parts of each sector were hardest hit. Excluding motor vehicle related traders, 1,790 retailers shut their doors for the last time in 2022 and 909 wholesalers. That compares to 930 non-automotive retailers failing in 2021 and 461 wholesalers.
‘The transport & storage sector saw firms entering administration across the board. 95 postal and courier companies failed in 2022, as did 109 warehousing and support companies and a staggering 782 road transport organisations. That compares to 54 postal and courier companies closing in 2021, together with 88 warehousing firms and 532 road transport operators.
‘Certainly, for the first half of this year, it will be hard to spot any “green shoots”. The International Monetary Fund (IMF) has given a gloomy outlook for the UK, predicting that Britain will be the only major economy to shrink in 2023.
‘However, we do believe that we are near the end of this dip. It is likely that many surviving retail and supply chain companies have learned to adapt to challenging market conditions. We certainly don’t expect to see as many companies failing this year.
‘One of the most pressing problems facing retailers and their international delivery partners continues to be 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. 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. However, ParcelHero’s new volumetric weight tool not only calculates typical volumetric weight but also works out the actual weight the specific carrier and service will bill against.’