The retail sector is bearing the brunt of declining consumer confidence, with administrations up 102% on the same period last year, according to Deloitte.
It also found across all sectors total administrations are up 20% year on year.
Deloitte, the business advisory firm, said the total number of companies falling into administration in the first quarter of 2009 has risen by 20% on the same period last year, and up 1% from 916 in Q4 2008 to 922 companies in Q1 2009.
Lee Manning, partner in reorganisation services at Deloitte, said: ‘The retail figures demonstrate the impact the recession has had on the real economy and consumer confidence. Economic uncertainty is causing consumers to hold back, pay off their debts and prepare themselves for the worst; discretionary spend is therefore being cut back.
‘As a result, the retail sector is being hit - the number of administrations has risen dramatically compared with the same period in 2008. The first quarter of 2008 saw 56 companies fall into administration compared with 113 this time around. We have seen a number of big names such as Zavvi, Mosaic, Stylo, Land of Leather, Whittards, and this week Bay Trading collapse already this year, and there may be more to come.
‘Last week’s Budget announcement of an additional £5bn to the trade credit insurance scheme will, however, boost confidence in the sector and provide greater certainty for retailers. Indeed, yesterday’s announcement of JJB’s CVA approval will prove significant in paving the way for other retailers to explore the alternative options available to them.’