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Professional services giant PwC has warned of a fresh surge in retail and hospitality insolvencies in early 2025 after its latest research showed that insolvencies among retail businesses had jumped in the third quarter.
PwC’s quarterly insolvency barometer for Ireland found that the retail sector has accounted for a quarter of all insolvencies so far this year, with 76 retail businesses becoming insolvent in the three months to the end of September, as well as 43 in each of the first two quarters. The total of 162 means the sector has recorded the most insolvencies among Irish companies for the year to date.
Hospitality also accounted for 110 insolvencies, or 17% of the total, over the first nine months, with businesses accumulating some €37.2M in debt, PwC said. In all, 31 insolvencies were recorded in the hospitality sector in the third quarter, following 49 in the first quarter and 30 in the second quarter.
Hospitality remains one of the hardest-hit industries, the report says, with its annual insolvency rate of 58 per 10,000 businesses — more than double that of retail, which has a rate of 27 per 10,000. And PwC predicted that hospitality insolvencies will increase sharply in the first quarter of 2025, in line with trends in previous years when businesses typically trade in the run-up to Christmas and then close down in January.
Several major retail real estate deals have transacted recently as confidence in the market returns, including the acquisition of The Square and movement in two major Dublin malls.
“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,” PwC Ireland Business Recovery Partner Ken Tyrrell said in a statement.
Across all sectors, PwC reported 661 insolvencies across the first nine months of the year, up 35% on the same period in 2023 and 86% ahead of the same period in 2022, as it forecast over 900 insolvencies by the end of the year.
While the insolvency rate of 32 per 10,000 businesses has more than doubled since 2021, it is below the 20-year average of 50 and remains well below the 2012 peak of 109 per 10,000 businesses.
Insolvencies continue to be concentrated in the east of the country, with 344, or more than 53% of all insolvencies for the year so far, recorded in Dublin.
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