On-trade administrations down

The UK on-trade has received a welcome boost with the news that administrations in the sector fell by 31% in the second quarter of the year.

Year-on-year the sector has also fared better with a decrease of 9% – bucking predictions that the licensed trade would continue to be particularly hard hit due to a combination of factors affecting consumer confidence and spend.

Commenting on the figures Mark Wilson, partner at Baker Tilly Restructuring and Recovery, said: “This quarter’s insolvency figures for the licensed trade show a decrease nearly at the levels back in Q1 2010 which is a remarkable recovery for the sector.

“Predictions were that this sector would be particularly hard hit due to the austerity measures taking effect and the resulting negative impact on consumer confidence.

“However the concern is that this could be just a blip. With expected belt tightening arising from general economic uncertainties and an apparently weakening jobs market, it is difficult to see how discretionary spend is going to hold up in the short to medium term.

“Those licensees that have survived the last few years have evidently become more savvy to the needs of their market.

“The figures demonstrate many have overcome the double whammy of a traditionally quiet trading period and the increase in VAT in Q1, perhaps having taken full advantage of the additional Bank Holidays and unseasonably good weather at the start of Q2.

“However, given the fluctuations in the Eurozone and wider European market it is likely to have an impact not only on the UK market but tourism as well due to spending being reigned in elsewhere.

“It is hard to predict what the future holds but we are likely to see a truer picture in the latter half of the year.”