Record numbers of businesses in financial distress

[WaveJumper]

Quite bleak news on the BBC this morning I know the first few months of any new year can be very shaky wondering what the general feeling was out there are you looking at your own spread sheets wondering what the future holds are you being hit by increased rent, energy or are the new NI costs pushing you over the edge or are you far more optimistic about the future.

Record jump in businesses in financial distress

Businesses in the most distress include those in hospitality, leisure and retail, say insolvency specialists.

www.bbc.co.uk

 

[Mark T Jones]

I'm seldom a doom-monger, but in reality the economy has been limping along since lockdown - and certain sectors including hospitality and care have another double-hit coming in April

From where I sit, there are several signals including lots of procrastination in capex spending (partly countered by frantic spending by those with budgets who fear they won't be renewed)

But the biggest concern for me is the disproportionate growth of non-specific loans over purpose-led funding like asset finance.

 

[nick8019]

It's best to stop propping up failing businesses. Rip off the bandaid and let it heal and come back stronger

 

[WaveJumper]

I'm seldom a doom-monger, but in reality the economy has been limping along since lockdown - and certain sectors including hospitality and care have another double-hit coming in April

From where I sit, there are several signals including lots of procrastination in capex spending (partly countered by frantic spending by those with budgets who fear they won't be renewed)

But the biggest concern for me is the disproportionate growth of non-specific loans over purpose-led funding like asset finance.

Yep not going to be that much growth in the economy as those who have the funds don't reinvest. I was talking to someone yesterday (commercial agents) ref the retail sector some of the big names have got plenty of money swilling around in their coffers but they not looking for big investment in UK this year and quite possibly we will see the money going overseas.

Not looking to good for the commercial property market

 

[JEREMY HAWKE]

Maybe it is a boot strapping period
A term I learnt from you wise old foxes on here

 

[ChrisCallaghan]

From my end I've certainly seen an increase in new enquiries from struggling companies in the hospitality sectors, all with similar themes - have been limping along, just about coping with increased energy and rent costs, but they feel increased staffing costs will tip the balance.

I cannot speak for everyone in my industry, but what is troubling for the economy in general, is that these directors are then leaving the hospitality sector entirely. Normally I'd see a healthy amount wanting to restart following a liquidation, but most are wanting to close down completely and seek an employed role elsewhere.

 

[HFE Signs]

And this is before the new rules come into force in April

 

[DontAsk]

"Businesses in the most distress include those in hospitality, ..." Far too many of those. I wouldn't be sad to see some of the identikit chains close a few branches. Hopefull independents will pick up the trade.

If anything I am seeing an uptick since the election. Business is healthier than this time last year, and the year before.

 

[Socio South West]

Quite bleak news on the BBC this morning I know the first few months of any new year can be very shaky wondering what the general feeling was out there are you looking at your own spread sheets wondering what the future holds are you being hit by increased rent, energy or are the new NI costs pushing you over the edge or are you far more optimistic about the future.

Record jump in businesses in financial distress

Businesses in the most distress include those in hospitality, leisure and retail, say insolvency specialists.

www.bbc.co.uk

In the Beeb scaremongering.... "
"While there is often a jump at the end of the year of companies in critical financial distress, the report found a sharp increase of 50% from September to December last year, taking the number of businesses in this category to 46,583. The record jump, since Begbies Traynor started collecting such data in 2004, was up from 31,201 the three months before."

Some of us remember the 1980s..... when Maggie T in her early days in power did just what @nick8019 advocates, and previously propped up businesses tumbled by the thousand.

 

[Mark T Jones]

"Businesses in the most distress include those in hospitality, ..." Far too many of those. I wouldn't be sad to see some of the identikit chains close a few branches. Hopefull independents will pick up the trade.

Sadly, it's the opposite of what will happen

Chains may come and go,independents will go.

Overall, B & M businesses, particularly those with staff will feel the most pain

 

[Mark T Jones]

Maybe it is a boot strapping period
A term I learnt from you wise old foxes on here

'The paradox of thrift'

In anticipation of hard time, people pause spending, so creating a recession.

 

[fisicx]

I’m maybe part of the problem. I plan meals so I only go shopping once a week. I meet with friends at their homes rather than go to a restaurant (way too expensive). I have beer in the house so don’t go to the pub. I don’t buy stuff or new clothes (wearing a jumper that’s at least 10 years old). The car is 5 years old and still going so don’t need a new one.

If there are more like me then I can see why retail and hospitality are struggling.

But the good news is big tech is spending billions on new bitbarns.

 

[WaveJumper]

Unless of course he's buying concert tickets however I agree and would also add unlike back in my younger days when you were out every night it appears to me anyway the "new" younger generation are not doing this as above it's a visit to friends, nights in etc etc and of course they never go out shopping its all done on line.

 

[fisicx]

We went to a local zizzi two weeks to meet up with family. The bill for the two of us was £120. Can’t afford that very often. Don’t even do takeaway any more as the price has rocketed.

Did a spag bol yesterday. Total cost: £8. It will keep us fed for 3 days.

 

[BubbaWY]

Unless of course he's buying concert tickets however I agree and would also add unlike back in my younger days when you were out every night it appears to me anyway the "new" younger generation are not doing this as above it's a visit to friends, nights in etc etc and of course they never go out shopping its all done on line.

Im a big advocate of the 'local'. Started sneaking in as an 17 year old and its remained a big part of my life since (now 47). Yes, I enjoy a pint, but its more the community aspect of it. But you are right...when I first started going in the pub, there was probably a group of 20 or so of us. But I am not sure where the younger generation go. Town is dead (used to be heaving back in my clubbing days) and local pubs struggle along.

 

[WaveJumper]

Im a big advocate of the 'local'. Started sneaking in as an 17 year old and its remained a big part of my life since (now 47). Yes, I enjoy a pint, but its more the community aspect of it. But you are right...when I first started going in the pub, there was probably a group of 20 or so of us. But I am not sure where the younger generation go. Town is dead (used to be heaving back in my clubbing days) and local pubs struggle along.

I think a lot of the youth today (and my sons are now in their 30s) don't drink alcohol they seem to be more concerned about what they eating, whats in it and keeping fit.

As an side to this was over visiting my mother (94) on Saturday sitting watching telly and noticed every single ad break there was another advert from a different meal delivery company, not watching live TV these days I had not noticed this before. Who the hell is signing up to all those monthly plans it must be I am gussing all the couples out at work all week who have no time for cooking

 

[BubbaWY]

I think a lot of the youth today (and my sons are now in their 30s) don't drink alcohol they seem to be more concerned about what they eating, whats in it and keeping fit.

Thats definitely where I went wrong.

 

[DontAsk]

Sadly, it's the opposite of what will happen

Chains may come and go,independents will go.

So the problem is there's simply no demand for hospitality.

 

[DontAsk]

In anticipation of hard time, people pause spending, so creating a recession.

Exactly, My, then new, business crashed before the 2008 crisis really hit. Thankfully bounced back afterwards. Similarly things were down last year which I am sure was uncertainty about the UK election, budget, US election, etc,... It's now picked up a bit.

I don’t buy stuff or new clothes (wearing a jumper that’s at least 10 years old). The car is 5 years old and still going so don’t need a new one.

Wife gets cast off from her sister and shops at charity shops as much as possible. I refuse to wear charity shop shirts or shoes, however.

Did a spag bol yesterday. Total cost: £8. It will keep us fed for 3 days.

You spent too much

 

[Mark T Jones]

So the problem is there's simply no demand for hospitality.

There's changing demand, but costs have risen beyond belief

 

[nick8019]

We went to a local zizzi two weeks to meet up with family. The bill for the two of us was £120. Can’t afford that very often. Don’t even do takeaway any more as the price has rocketed.

Did a spag bol yesterday. Total cost: £8. It will keep us fed for 3 days.

£120 for two at Zizzi!?

 

[fisicx]

£120 for two at Zizzi!?

Yup. But it was in Winchester and apparently prices are set by location.

 

[DontAsk]

Yup. But it was in Winchester and apparently prices are set by location.

It must have been a bit of a blow out to spend £60 each.

 

[fisicx]

It must have been a bit of a blow out to spend £60 each.

Three courses and a couple of beers. They seem to be more expensive than other locations. Zizzi doesn’t have fixed prices. We were surprised at the bill as were the others dining with us.

 

[MyEnergyDeals]

Energy Costs can be the difference between a business staying alive/profit or as I've seen many times the business closing the doors.

 

[tony84]

I'm seldom a doom-monger, but in reality the economy has been limping along since lockdown - and certain sectors including hospitality and care have another double-hit coming in April

From where I sit, there are several signals including lots of procrastination in capex spending (partly countered by frantic spending by those with budgets who fear they won't be renewed)

But the biggest concern for me is the disproportionate growth of non-specific loans over purpose-led funding like asset finance.

As a business we are in a pretty decent place, a good client bank, had a good January and look like we will have a good March/April (not sure about Feb yet, nothing lined up for it).

I took everything down to the knuckle in terms of committed expenditure in 2018-19 ready for 2020... Not because I knew covid was coming but because of Brexit. I did not know what to expect so got everything as lean as I could in preparation for that.

As Mark says, the economy as a whole has limped along since Covid (or Brexit...). 2020-22 were ok for us. 2023 was my worst year since being established. 2024 was a bit better but not where I should be.

I have no reason to think we are going to have a record year or anything even remotely close. But I think we might have an ok year. But it is very knife edge. So as I have done for the last 5 years, prepare for the worst and hope for the best. I will still be around next year, but I may or may not have had a holiday in that time depending on how well we do.

 

[iconic]

I’m maybe part of the problem. I plan meals so I only go shopping once a week. I meet with friends at their homes rather than go to a restaurant (way too expensive). I have beer in the house so don’t go to the pub. I don’t buy stuff or new clothes (wearing a jumper that’s at least 10 years old). The car is 5 years old and still going so don’t need a new one.

If there are more like me then I can see why retail and hospitality are struggling.

But the good news is big tech is spending billions on new bitbarns.

I bet you're fun at parties

 

[fisicx]

I bet you're fun at parties

Parties! That would require meeting other people and talking to them. Can’t be doing with all that.

 

[UKSBD]

My lad has always been careful, was working at our local co-op in our small local town, had meal deals when working which with his staff discount was probably about £2.50

Recently started new job, in larger town and is working right next to big shopping centre.
Now spending about £60 a week on Greggs, Nandos, Subway and the like

Hopefully the novelty will wear of soon.

 

[WaveJumper]

My lad has always been careful, was working at our local co-op in our small local town, had meal deals when working which with his staff discount was probably about £2.50

Recently started new job, in larger town and is working right next to big shopping centre.
Now spending about £60 a week on Greggs, Nandos, Subway and the like

Hopefully the novelty will wear of soon.

Yep we may all of have been there in out youth hopefully the penny drops wasting over 3k a year on lunch is a waste take a packed lunch invest that £60.00 plus and anything else you can muster, its soon add up in to a sizeable chunk.

In a slightly different vane i used to have to go to Canary Wharf a lot for meetings always there early so used to stroll around its lower regions or sit and watch the world go by and always marvelled at the trade the coffee shops and eateries where doing most had queues out the door (probably a different picture these days) I could never get over how much people were spending on coffee and sandwiches obviously every day it was quite mind blowing.

Even stranger when people rocked up to meetings with their Costa or Starbucks proclaiming it was the best thing since sliced bread. Personally I have never had a decent cup of coffee from any of them ever so avoid them like the plague.

 

[Nathanto]

The bill for the two of us was £120. Can’t afford that very often.

Different ball game but a similar sentiment...

We don't do fast food very often but found ourselves behind schedule the other day so popped in to a handy Burger King for lunch. I was surprised to find that two burgers, fries and drinks came to over £25.00! (Actually for full transparency that did also include a, I think, £1.49 burger for our Dobermann )

always marvelled at the trade the coffee shops and eateries where doing most had queues out the door (probably a different picture these days)

It's still the case here in mid-Wales at least. We often have lunch out at pubs and garden centres and are always amazed at how busy they are. My girlfriend and her sister had lunch at a garden centre only yesterday and mentioned it was absolutely packed.

 

[DontAsk]

It's still the case here in mid-Wales at least. We often have lunch out at pubs and garden centres and are always amazed at how busy they are. My girlfriend and her sister had lunch at a garden centre only yesterday and mentioned it was absolutely packed.

What was the age profile of the clientele? Round here it's mostly boomers, a good proportion of who are probably on nice final salary pensions.

 

[Nathanto]

What was the age profile of the clientele? Round here it's mostly boomers, a good proportion of who are probably on nice final salary pensions.

I'd say around half are ten years older than me so that would make them boomers. The other half are mostly mums with kids meeting up for lunch with other mums, so much younger than us.

I'm always surprised at how much money is still floating around when the media would have you believe it's all doom and gloom. It's not a new phenomenon either, we've been remarking on how busy everywhere is since at least 2023.

 

[DontAsk]

I'm always surprised at how much money is still floating around when the media would have you believe it's all doom and gloom. It's not a new phenomenon either, we've been remarking on how busy everywhere is since at least 2023.

I know what you mean, but try walking around the centre of somewhere like Banbury on a weekday. Even somewhere like Leamington Spa is not like it was just a few years ago.

 

[UKSBD]

What was the age profile of the clientele? Round here it's mostly boomers, a good proportion of who are probably on nice final salary pensions.

I would say even older than that round here.

I'm a boomer and go and eat at garden centres with my 87 year old mum every few weeks, a lot of the people in there are her age.

She probably goes to lunch at different garden centres twice a week with a couple of friends same age as her and says it is always full with people her age.

 

[UKSBD]

Just to add.
I would be far more likely to go and have lunch at a garden centre now rather than a pub restaurant, fast food place.

 

[fisicx]

A lot of garden centres do a cheap meal for pensioners on one day or another. I plan to take advantage of this in 3 months.

 

[JEREMY HAWKE]

A lot of garden centres do a cheap meal for pensioners on one day or another. I plan to take advantage of this in 3 months.

False economy you will come away with 200 quids wotth of gardening equipment every time

Me I'm creeping up in age and yes I do have olive trees but I don't do garden centres
I am still happy to pay for 4 pints and burger and chips on a Saturday lunchtime in the White Heart

I will say it again You lot on here are as tight as a ducks ass
The reason that you all have a lot of money is because you have never spent any of it

 

[WaveJumper]

False economy you will come away with 200 quids wotth of gardening equipment every time

Me I'm creeping up in age and yes I do have olive trees but I don't do garden centres
I am still happy to pay for 4 pints and burger and chips on a Saturday lunchtime in the White Heart

I will say it again You lot on here are as tight as a ducks ass
The reason that you all have a lot of money is because you have never spent any of it

True but the wife makes up for it

 

[Nathanto]

False economy you will come away with 200 quids worth of gardening equipment every time

Welcome to my world!

This week, as well as a basket full of "so cute" Easter decorations, our life would (apparently) not have been complete without a new £150 dog bed and a £25 bottle of liqueur... and the rub is we're not even old enough to take advantage of any OAP lunchtime specials.