Consumer spending slump hits Yorkshire hoteliers

Research from insolvency body R3 shows that consumer-facing sectors in Yorkshire, such'‹ '‹as '‹'‹hotels, restaurants, pubs and retail, all saw '‹more businesses at higher than normal risk of'‹ '‹insolvency'‹ '‹in August'‹'‹.'‹R'‹3 said this'‹ reflects recent data which indicate'‹s'‹ that consumer spending has been falling for the'‹ '‹last three months across the UK.'‹In August the number of hotels in the region at above normal'‹ '‹risk grew by 4'‹ per cent'‹, taking the figure to 19.5'‹ per cent'‹, or almost one in five hotels. '‹However t'‹his is slightly better than the'‹ '‹national average of 20.6'‹ per cent'‹ at risk. Retail also struggled with 26.2'‹ per cent'‹ of shops in Yorkshire at higher'‹ '‹than normal risk,'‹ a rise of 3.6 per cent. This represents nearly 3,500 of the 13,300 active retail businesses '‹in the county and was'‹ '‹marginally worse than the UK-wide level of 25.3'‹ per cent'‹ of retailers at risk. Pubs in the region saw a 2.3'‹ per cent'‹'‹ '‹increase in those at above normal risk'‹, representing'‹ 21.6'‹ per cent of pubs'‹ compared with 22.3'‹ per cent'‹ across the UK'‹.'‹R'‹estaurants fared slightly better with a rise of just 1.4'‹ per cent'‹ since the previous month'‹, representing'‹ 23.5'‹ per cent of restaurants'‹'‹ '‹compared with 23.1'‹ per cent'‹ nationally.Yorkshire was close to the national average levels of businesses at risk in most other sectors'‹ '‹including manufacturing, technology and IT, construction and professional services. The only sectors'‹ '‹in which the region underperformed compared with other regions was tourist operators'‹,'‹ '‹where '‹30.6'‹ per cent are deemed to be'‹ at risk'‹ '‹in the region compared with a UK average of 28.6'‹ per cent'‹, and transport and haulage '‹which have '‹43.7'‹ per cent'‹ of'‹ '‹businesses in the negative band, significantly above the UK-wide average of 33.5'‹ per cent. However,'‹ '‹the region continued to perform strongly in agriculture with just 19.2'‹ per cent'‹ at risk compared with 21.3'‹ per cent'‹'‹ '‹nationally.Overall, more than 63,000 businesses in Yorkshire were deemed to be at higher than normal risk of'‹ '‹insolvency, a month on month rise of 3.4'‹ per cent'‹ bringing the level to 28.9'‹ per cent'‹ of active businesses in the'‹ '‹region, slightly above the national figure of 28.3'‹ per cent'‹.Adrian Berry, chair of R3 in Yorkshire and restructuring partner at Deloitte LLP, '‹said:'‹ '‹“While levels of businesses at risk in Yorkshire generally seem to be in line with the national picture, it'‹ '‹is concerning to see distress creeping up throughout the UK and across most sectors, with'‹ '‹businesses dependent on household spending being hit the hardest. '‹"'‹A recent survey from payments'‹ '‹company Visa found that UK consumer spending had fallen for the third consecutive month, providing'‹ '‹further evidence that people are feeling the impact of wage freezes and growing inflation.“As ever, our advice is for businesses to keep a close eye on their finances and seek professional'‹ '‹advice at the first sign of trouble.”R3 uses research compiled from Bureau van Dijk’s '‹"'‹Fame'‹"'‹ database of company information to track'‹ '‹the number of businesses in key regional sectors that have a heightened risk of entering insolvency'‹ '‹in the next year.R'‹3's research follows a Nielsen survey that shows the number of people'‹ who are cutting down on household spending is at '‹its highest level for two years as consumer confidence continues to plummet following the Brexit vote.More than half of '‹the nation admitted to resorting to cost-cutting measures in the second quarter of 2017, according to Nielsen's latest Global Survey of Consumer Confidence and'‹ '‹Spending Intentions.The collapse in sterling following Britain's decision to quit the EU resulted in inflation soaring to its highest level for nearly four years in May at 2.9'‹ per cent'‹, before easing back to 2.6'‹ per cent'‹ in recent months.Wage growth, meanwhile, has not kept up pace, meaning consumers have less to spend on daily essentials.