Wholesale supplier insolvencies more than double following withdrawal of government support

Retailers could have access to fewer specialist and regional wholesale suppliers as the number of wholesale insolvencies has begun rising again. 

Figures released this month by the Insolvency Service revealed that the number of wholesalers specialising in the sale of food, beverages and tobacco that went out of business between January and September 2022 rose annually from 57 to 129. 

Similarly, the number of household goods wholesalers that entered insolvency in the same period rose from 80 to 147. 

The numbers represent a four-year high and are the first increases since insolvencies began dropping in 2019. 

Food and household wholesalers represented a near-20% increase on 2019 figures. 

Meanwhile, a similar trend was shown with food, beverage and tobacco retail insolvencies. 

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During the nine-month period in 2022, insolvencies stood at 144. This was up from 111 in 2019. 

Wholesale expert David Gilroy warned this trend is likely to continue as wholesalers no longer have access to the same levels of government support as during the pandemic. 

He told Better Retailing: “There are massive increases in operating and stock input costs. This has led to reduced margins and less cash in the business. 

“This will be replicated across many businesses as economic conditions worsen, but it is particularly acute in wholesale with its tight operating margins. Big wholesalers can ride it out, but the smaller ones will struggle.”