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Experts have warned that corporate restructurings and bankruptcies are likely to intensify next year as pressure on UK retailers and the hospitality industry is expected to “intensify”.
Bankrupt business bosses say changes in business rates and rising labor costs could put many high street businesses at further risk from next April.
It comes after official insolvency service data showed corporate insolvency rates were rising year on year as companies also faced fragile consumer confidence.
government The number of bankruptcies this year to November was “slightly higher” than in 2024, the data showed, although it was down month-on-month.
Industry experts tell press association They expect bankruptcies to continue to rise next year, particularly in sectors such as retail and hospitality.
In 2025, a large number of brands, e.g. river islandClaire’s and Pizza Hut A major reorganization was undertaken.
Earlier this month, the fast-food chain Leon It becomes the latest chain to cut sites as part of a restructuring after being bought back by co-founder John Vincent.
Matthew Richards, co-head of restructuring and insolvency at consultancy Azets, told the Press Association they expected the recent troubles experienced by the sectors to continue next year.
He said: “The retail and hospitality sectors have seen a surge in bankruptcies and inquiries over the past three months as a range of toxic financial issues took their toll on businesses in these sectors.
“The increase in the national minimum wage and employers’ NI (National Insurance) earlier this year was a blow, driving up costs at a time when many businesses were struggling to stay solvent.
“With new business rates and a higher national minimum wage coming into effect from April 2026, we expect insolvency rates to rise in the retail and hospitality sectors as businesses struggle to cope with increased expenses.”
Interpath’s UK chief executive Will Wright, who oversees the process for Claire’s and TGI Fridays, agreed and highlighted the pressures on tight household budgets.
He said: “Retailers, leisure operators and hotel groups are hoping for a bit of breathing space after a painful few years.
“Instead, rising operating costs, tighter household budgets and higher business rates mean pressures are likely to intensify as 2026 progresses.
“Against this backdrop, we do expect an increase in restructuring activity. Not a collapse, but a clear shift.”
Kroll managing director Benjamin Wiles also stressed that the “double squeeze” of consumer pressure and rising employment costs could lead to bankruptcies.
At the same time, the company also predicts that retail management may increase in 2025.
He said: “If there is one word to describe 2025, it is ‘uncertainty’.
“Tough economic conditions and delayed budgets mean many businesses have adopted a ‘wait and see’ approach.
“In contrast, 2026 will be a year of difficult decisions. Several industries are already under pressure, with retail overheads expected to be more than 7% higher in 2025 than in 2024.”