More than 5,000 retailers and wholesalers could go bust next year, according to research from BDO Stoy Hayward.
The report says lower wage growth, declining customer credit and higher unemployment could push 4,630 companies in the sector out of business in 2009, rising to 5,070 next year.
This would be double the number that failed in 2007, but less than BDO Stoy Hayward forecast in March, with unemployment having risen more slowly than economists had predicted.
'A flexible labour market has allowed employers to reduce hours and wages rather than make redundancies,' said Tony Nygate, retail business restructuring partner at BDO Stoy Hayward. The forecasts from the study have been accurate to within an average of 4.5% over the past five years.