UK retail and hospitality business owners breath a sign of relief as statistics released today by The Insolvency Service show that company insolvencies fell to 1,671 in December 2025, a decrease of 10% month-on-month, after facing one of the most challenging years.
Wholesale, retail and hospitality traders accounted for 30% of all company insolvencies in the year to November 2025, with 7,145 businesses affected – highlighting that while pressures remain elevated on the UK high street, the latest data suggests some stabilisation as firms enter the New Year.
Giuseppe Parla, Restructuring & Insolvency Director at Menzies LLP, says the New Year is not only time for new resolutions, but for new plans:
“While it encouraging to see insolvency rates decrease, we know that big name brands are struggling and the outlook for 2026 is far from rosy.
Retailers and hospitality businesses who had hoped for more support from the Autumn Budget are now facing increased uncertainty. It seems as though the New Year may already see another Government U-turn, this time backing down on plans to scrap business rates relief for pubs that has been in force since the pandemic. This could be a real lifeline for pubs, who have warned of widespread closures due to rising rates. But, the move would still fall short of providing vital support for other hospitality businesses.
Christmas is notoriously the hospitality sector’s busiest period, but spending was down compared to previous years, which has only added to business pressures. We have already seen early casualties in this sector this month, such as TGI Fridays who recently announced further closures, which sets the year off on shaky footing.”
Giuseppe adds that 2026 will be a year of change:
“In more positive news, we have seen interest rates fall and GDP shows small increases for the UK economy. However, 2026 is going to be a year of change, which is going to require significant planning in order to keep up.
AI will be more prominent in our day to day lives and cybersecurity will be high on everyone’s agenda as we move more to online. So, embracing these tech changes is essential and businesses that are agile are the ones that will survive.
In retail, there is a real appetite from consumers for a more joined up experience from in store shopping to online and apps. In hospitality, it’s all about delivering a special experience, and in both sectors, those that deliver those experiences best, are likely to have the most success.
All too often we see struggling businesses put their heads in the sand, hoping things will get better before it is too late. But, as ever, our message to businesses is clear: please act early if you anticipate financial trouble. Doing so ensures that more options are available for you to address business issues, to secure a profitable future and remain trading.”
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