Food and drink retailers are some of the most badly affected by the recession, according to a new ‘Retail Distress Tracker’ survey from business consultants KPMG.
The analysis tracks UK companies facing stress in a number of areas, such as cash flow and refinancing.
Retailers selling DIY and other products for the home were under the most pressure, but KPMG said that “rather surprisingly…the non-discretionary food sector has been affected.”
The Retail Distress Tracker also shows that certain businesses in the food and drink sector are struggling to cope with the economic downturn, making up 25% of the total.
Chris Laverty, restructuring partner at KPMG, said: “Smaller food and drink retailers, be they local grocery store or upmarket wine seller, are experiencing declining sales as consumers rein in spending.
“Small chains of retailers lack the clout of their supermarket competitors to squeeze wholesalers and change the product offering in a short timeframe. The main supermarkets have been adept at meeting the changing needs of their customers and as such have bucked the downward retail trend.
“By contrast, it is very difficult for smaller retailers, without sophisticated marketing and buying teams, to change their product offering with the speed of their larger counterparts.”
