Insolvencies among retail businesses jumped in the third quarter as business advisory giant PwC warned of a fresh spike in both retail and hospitality insolvencies in early 2025 amid ongoing stresses in the two sectors.
The retail sector now accounts for one in four of all insolvencies so far this year, PwC’s quarterly insolvency barometer found, with 76 retail businesses becoming insolvent in the three months to the end of September on top of 43 in each of the first two quarters. The 162 total means the sector has recorded the highest number of insolvencies for the year to date.
Across all sectors, PwC said there were 661 insolvencies in the State in the first nine months of the year, up 35 per cent on the same period in 2023 and 86 per cent ahead of the same period in 2022. It is forecasting more than 900 insolvencies by the end of the year.
The current insolvency rate of 32 per 10,000 businesses has more than doubled since 2021, though it does remain below the 20-year average of 50 and the previous peak, recorded in 2012, of 109 per 10,000 businesses.
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Hospitality accounted for 110 insolvencies, or 17 per cent, for the nine months to end September 2024, with businesses leaving some €37.2 million behind in debt, PwC said.
There were 31 insolvencies recorded in the hospitality sector in third quarter. That follows 49 in the first quarter and 30 in the second quarter. Some 98 per cent of the 2024 hospitality insolvencies were liquidations.
Despite the steadying numbers hospitality remains one of the most adversely affected industries, the report noted, with an annual insolvency rate of 58 per 10,000 businesses – double that of retail, where the rate is 27 per 10,000.
Based on the most recent financial statements of the hospitality companies liquidated in the past 21 months, the average liabilities left behind per hospitality company was about €380,000, PwC said.
Hospitality insolvencies can be expected to increase sharply in the first quarter of 2025, PwC warned. This is in line with similar trends in previous years where businesses manage to stay open in the run-up to Christmas and then struggle in January. “We anticipate a similar trend in the retail sector once businesses have traded through Christmas and then assess their viability for the year ahead,” PwC said.
Ken Tyrrell, business recovery partner at PwC Ireland, said smaller businesses in particular faced “significant challenges” in the months ahead.
“With the increasing cost of doing business in Ireland we continue to see insolvencies rise in recent years from historic lows,” he said. “Both the hospitality and retail sectors are showing signs of stress, and will be hoping for a busy trading period in the run-up to Christmas, a traditionally very important time of year for both sectors.”
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