Company restructurings and insolvencies are likely to tick higher next year, as pressures on retailers and hospitality businesses across the UK are expected to “intensify”, experts have warned.
Insolvency bosses have indicated that changes to business rates and higher labour costs could put many high-street businesses at further risk from next April.
It comes after official insolvency service data showed that corporate insolvencies have risen year-on-year, as firms have also contested with fragile consumer sentiment.
Government figures showed that insolvencies this year up to November are “slightly higher” than in 2024, although there was a reduction month-on-month.
Sector experts have told the Press Association that they expect insolvencies to continue to rise next year, particularly in sectors such as retail and hospitality.
In 2025, a raft of brands such as River Island, Claire’s and Pizza Hut underwent significant restructurings.
Earlier this month, fast-food chain Leon became the latest chain to cut venues as part of a restructuring after being bought back by co-founder John Vincent.
Matthew Richards, joint head of restructuring and insolvency at advisory firm Azets, told the Press Association that they expect recent troubles in these sectors to continue next year.
He said: “The last three months have seen a spike in retail and hospitality insolvencies and enquiries as a toxic cocktail of financial issues has taken its toll on businesses in these sectors.
“The increases to national minimum wage and employers’ NI (national insurance) earlier this year were a blow – and pushed up costs at a time when many businesses were fighting to stay solvent.
“With new business rates and a higher national minimum wage taking effect from April 2026, we expect retail and hospitality insolvencies to rise as firms struggle to meet the increased expenses they will impose on them.”
Will Wright, UK chief executive at Interpath, which has overseen processes for Claire’s and TGI Fridays, concurred and highlighted pressure from tight household budgets.
He said: “Retailers, leisure operators and hospitality groups were hoping for a little breathing space after a bruising couple of years.
“Instead, rising operating costs, tighter household budgets and increases to business rates mean that pressure is likely to intensify as we move through 2026.
“Against this backdrop, we do expect to see an uptick in restructuring activity. Not a collapse, but a definite shift.”
Benjamin Wiles, managing director at Kroll, also highlighted that insolvencies could arise from the “double squeeze” from consumer pressures and higher employment costs.
It came as the company also predicted that retail administrations were likely to have risen in 2025.
He said: “If one word summed up 2025, it would be ‘uncertainty’.
“Tough economic conditions and a delayed budget meant many businesses adopted a ‘wait-and-see’ approach.
“In contrast, 2026 is shaping up to be a year of hard decisions. Several sectors are already under pressure, with retail administrations for 2025 projected to be more than 7% higher than in 2024.”
