Retail insolvencies in the Republic of Ireland spiked during Q3 of 2024, up 77% from Q1 and Q2 this year.

PwC’s latest Insolvency Barometer, published today, reveals that insolvencies in the Republic of Ireland are up 35% for the first nine months to end September 2024 (661) compared to the same period in 2023 (491) and are up 86% compared to the same period in 2022 (356). 

The current insolvency rate of 32 per 10,000 businesses has more than doubled since 2021 (14) but remains below the 20 year average (50) and far below the previous peak in 2012 (109).  

Total insolvencies forecast to be over 900 by year-end

If the current trend continues, PwC’s latest Insolvency Barometer forecasts total insolvencies will be over 900 by the end of the year, in line with our forecasts in the early part of this year. 

Retail insolvencies have increased by 77% in Q3 (76) compared to both Q2 (43) and Q1 (43). The industry has also recorded the highest number of insolvencies (compared to all other industries) for the year with 162 to date, accounting for nearly 1 in 4 of all insolvencies. 

Hospitality accounts for nearly a fifth of all insolvencies for the nine months to end September 2024 leaving some €37m in debts

The hospitality industry accounted for 17% of total insolvencies for the nine months ended September 2024. At the same time, hospitality insolvencies remained steady for the third quarter of the year, with 31 recorded insolvencies which is consistent with Q2 (30) and below Q1 (49). However, hospitality is one of the most adversely affected industries with an annual insolvency rate of 58 per 10,000 businesses, which is double that of Retail (27 per 10,000) and three times that of Construction (17 per 10,000).

Based on the most recent financial statements of the hospitality companies liquidated in the past 21 months, the average total liabilities left behind per hospitality company was circa €380,000. Of the 110 hospitality insolvencies recorded during 2024, 98 of those were liquidations and left behind total liabilities of circa €37.2m.

Hospitality insolvencies can be expected to increase sharply in quarter one of 2025. This is in line with similar trends from previous years where these businesses manage to stay open in the run-up to Christmas and then struggle in the first quarter of the new year. We anticipate a similar trend in the retail sector once businesses have traded through Chritsmas and then assess their viability for the year ahead. 

Liquidation remains the most common form of insolvency, accounting for more than 84% of all insolvencies in the year to date, with 99% of all liquidations being SMEs.

Examinerships/SCARPS continue to be under-utilised

With 32 Examinerships/SCARPs recorded in the year to date, rescue processes account for a mere 5% of insolvencies. This is consistent with the same period of 2023 and suggests that there are underlying viability issues with the companies going straight into liquidation rather than seeking rescue processes such as Examinership or SCARP. 

Lender patience

With 76 receiverships for the year to date, which is largely consistent with the same period for 2023 and 2022, lender patience appears to be continuing. 

Insolvencies continue to be concentrated in the east of the country with over 52% of all insolvencies for the year recorded in Dublin (344). Cork (45), Galway (39), Wicklow (27) and Meath (22) making up the top 5 counties and account for almost 75% of all insolvencies for the year to date.

The total number of insolvencies reported in the UK for Q2 2024 declined slightly compared to the same quarter in 2023, showing the trend of volumes of insolvencies in the UK remains steady. 

Ken Tyrrell,  Business Recovery Partner, PwC Ireland, said: “The intention of Budget 2025 was to put in place the policies and measures to support businesses and continue the country's positive trajectory. While the broader economy is performing well, we do see certain types of businesses facing significant challenges in the months ahead, particularly for smaller businesses. And with the increasing cost of doing business in Ireland, we continue to see insolvencies rise in recent years from historic lows. 

“Both the hospitality and retail sectors are showing signs of stress and will be hoping for a busy trading period in the run up to Christmas, a traditionally very important time of year for both sectors. Helpfully, Budget 2025 has included a grant for businesses that will be given a cash injection of €4,000 “power up” grant which will be paid prior to Christmas, for all businesses with a rates bill of under €30,000. 

“It is hoped that some of the measures announced in Budget 2025 will ease the cost of doing business.  We also hope that some of the complexities in the tax system will be alleviated. However, sound business principles and good forward cash flow planning cannot be underestimated for having sustainable businesses for the long term.” 

Ends

Notes to editors

Over 4,500 businesses saved as a result of Government COVID supports 

In PwC’s inaugural report, ‘Act Now: From Recovery to Growth’ published in February 2022, it was estimated that over 4,500 businesses were saved from failure primarily as a result of the  Government’s COVID supports, with a number of these businesses essentially being put on ‘life-support’. 

Why we use a per 10,000 business measure - Insolvency Rate 

PwC’s analysis is based on a per 10,000 measure. It is also widely used when comparing the birth or death rates across different regions or countries.  It is a simple yet effective statistic for comparison purposes between different periods, industries, towns, counties or countries with different population sizes. It provides meaningful context to the numbers rather than simply looking at them in absolute terms.

SCARP stands for Small Company Administration Rescue Process. The small company rescue process (“SCARP”) was enacted by the Government to provide an alternative restructuring tool for businesses commencing in December 2021.

Creating a cash-conscious culture is critical to ensure organisations can improve and accelerate their resilience to mitigate the impacts and flourish in the future. To achieve this, everyone in an organisation needs to be focused on cash. This is a collective responsibility from the boardroom and across the business - not just the finance team or treasury to make decisions impacting cash.

Five ways to optimise a company’s cash culture

1. Make cash the business of everyone in the organisation 
2. Cash can mean different things to different people, so make cash relevant to everyone  
3. Forecasting cash and appropriately granular scenario planning  
4. Understanding and sharing your minimum cash thresholds  
5. Optimising supplier and customer working capital terms and relationships