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Signs of recovery for UK food industry

October 27, 2015 | Financial Saviour

New research has found that the ‘significant’ financial distress that was on the rise among UK food suppliers only a few months ago has dropped for the first time in over two years.

At the end of July 2015, Financial Saviour reported on the increase in food suppliers in the UK that were experiencing ‘significant’ financial distress, so it’s immediately evident that there has been a quick turnaround.

Insolvency practitioners Begbies Traynor have been closely monitoring the financial situation of the UK food supply chain over the last number of months, and it is their research that has now shown a movement towards stability in this struggling sector for the first time in 27 months.

5% quarterly decline

There were, according to the Red Flag research from Begbies Traynor, 5,258 UK food retailers who were experiencing ‘significant’ financial distress in the second quarter of 2015, and this then decreased to 5,002 in three months to the end of the third quarter.

That is a quarterly decline of 5% – the first of its kind for the food retailers since the second quarter of 2013, but perhaps there is cause for concern by the fact that this total amounted to just under 2,500 struggling businesses, 50% fewer than the total of today.

158% overall increase

It’s not just this 50% figure that has seen a significant increase over the previous two years either. UK food and beverage manufacturers, including many farms and suppliers to the major UK supermarkets, deemed to be experiencing ‘significant’ financial distress has increased a huge 158% from 628 businesses at the end of 2013’s second quarter to the same stage in 2015.

This has since fallen another 4% quarterly to 1,553 at the end of the third quarter of 2015, but it remains to be seen how drastically this is set to continue falling over the coming months.

Financial Saviour are experts in all aspects of financial restructuring and business turnaround, so you can be sure that we have the necessary knowledge and experience to help your business achieve stability.

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