The number of restaurants and retailers operating in the North West continues to rise rapidly despite a string of high-profile failures in both sectors, insolvency and restructuring trade body R3 has said.
R3 said that its research shows that despite high-profile operators in the casual fining segment going into administration or drastically reducing their estates through Company Voluntary Arrangements, new entrants are not being deterred.
The number of restaurant businesses has risen by 7% since January to reach more than 8,900 in July, while the number of retail businesses was up by 6% at over 22,700.
Furthermore, said R3, in both sectors the North West has a smaller proportion of companies at elevated risk of insolvency than some other sectors. Amongst North West retailers, 37% are considered ‘at higher than usual’ risk, while the figure for restaurants is 31%.
These figures compare well to professional services and tech, where 48% are considered at risk and where business numbers are growing more slowly.
Paul Barber, North West chairman of R3 and a partner at Begbies Traynor, said: “Despite some high profile failures in recent months, these figures show that the restaurant and retail sectors in the North West remain in good health.
“Both have always been popular choices for start-ups as many people harbour ambitions to run their own shop or café. However competition is tough and it needs to be exactly the right offering in the right location – even a concept that is successful in one place can flop in another.
“It is great to see that entrepreneurs are still willing to take the risk. Having a regular flow of new entrants coming into the market can only be a good thing in helping to liven up the local food scene and give towns and city centres a fresh appeal.”
Across all sectors, the overall number of businesses in the North West continued to rise in June and July after a drop in May, when numbers fell for only the second time in recent history. There are now over 370,000 active businesses in the North West, 2% more than in January.
All figures are from R3’s latest insolvency risk tracker, compiled using Bureau van Dijk’s Fame database. The research is based on the number of active businesses and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.