THE number of Bournemouth businesses in financial distress has risen across the majority of sectors, new figures show.
There were 937 businesses in “significant” difficulty in the first quarter of 2017, compared with 874 in the last three months of 2016, according to analysis by business recovery specialist Begbies Traynor
Commentators say the devaluation of the pound and rising food and energy prices have put a strain on the supply chain.
And they warned of continuing uncertainty without Brexit, with firms uncertain about their distribution channels and access to labour from mainland Europe.
The seven per cent rise was in line with the national picture.
Across the south west as a whole, there were 23,881 firms in significant financial distress, up six per cent on the previous quarter.
Among the worst hit sectors in Bournemouth were food and drug retailers, where the number significant financial distress was up from 23 to 26, and food and beverage, which rose from 14 to 16.
But industrial transport and logistics showed an increase too, Begbies said. The only sectors to show a slight fall in financial distress levels were financial services and construction.
Julie Palmer, regional managing partner at Begbies Traynor’s Bournemouth office, said: “Given the scale of the increases in distress during Q1, it would appear that food suppliers, logistics firms and wholesalers are yet to fully pass on rising costs to their customers.
“But it is only a matter of time before we start to see this coming through, especially given the added margin pressures associated with the new National Living Wage. Once those costs ultimately feed through to consumers, we’d expect further pressure on sectors exposed to discretionary spending such as retail, bars and restaurants, travel and leisure.”
Ric Traynor, executive chairman of Begbies Traynor, said: “These figures show that rising energy and food prices, combined with the devaluation of sterling, have undoubtedly put a strain on the much of the UK’s supply chain. As we wait to see what a future UK trade agreement with Europe might look like, these suppliers face continued uncertainty, not just in terms of their European distribution channels but also with regards to staffing, given their higher reliance on European migrant workers.”