Retail businesses continue to struggle as sector ranks among worst for five year business survival
Reports suggest that more than 50,000 British firms are in critical financial distress, while 36% of UK small businesses say they are stuck in survival mode. This comes amid slower economic growth and persistent inflationary pressures, with high costs continuing to weigh on business confidence and discourage hiring.
Against this backdrop, new data suggests that there is a clear divide in business survival rates across the country by sector. Insolvency practitioners at Liquidation Centre have analysed business survival rates across various UK sectors, revealing large differences in the amount that reach their fifth birthday. Richard Hunt, Director at Liquidation Centre, comments on the findings and offers advice for younger businesses navigating this challenging environment.
Key Findings:
- Just 34.5% of retail businesses survive for five years, placing retail among the three sectors with the lowest survival rates.
- Retail’s five-year survival rate is 21.6 percentage points below health, the highest-ranking sector at 56.1%.
- Only transport and storage (20.5%) and business administration and support services (32.7%) have lower five-year survival rates than retail.
Five year business survival rates in UK by sector
| Sector | 5-year survival rate (%) |
| Health | 56.1 |
| Property | 52.4 |
| Education | 52.3 |
| Finance and insurance (excluding holding companies) | 50.2 |
| Arts, entertainment, recreation and other services | 50.0 |
| Motor trades | 46.4 |
| Construction | 43.3 |
| Wholesale | 41.7 |
| Production | 41.1 |
| Professional, scientific and technical | 40.1 |
| Accommodation and food services | 38.1 |
| Information and communication | 37.0 |
| Retail | 34.5 |
| Business administration and support services | 32.7 |
| Transport and storage (inc. postal) | 20.5 |
*The full data set including all regions, cities, and sectors analysed is available to view here.
Retail businesses face significant survival challenges
Retail businesses recorded a five-year survival rate of 34.5%, meaning that around two thirds of businesses do not make it to their fifth birthday.
This places retail among the sectors with the lowest survival rates in the analysis, with only business administration and support services and transport and storage recording lower rates.
The figures come as retailers continue to operate against a backdrop of rising costs and pressure on consumer spending. For businesses already operating on relatively tight margins, higher operating costs can leave less room to absorb changes in demand or unexpected financial pressures.
Health, property and education businesses have the highest five-year survival rates
Health businesses recorded the highest five-year survival rate at 56.1%. Property businesses follow at 52.4%, while education businesses have a five-year survival rate of 52.3%.
At the other end of the table, transport and storage businesses have the lowest five-year survival rate, at just 20.5%. This means that almost four in five businesses in the sector do not remain trading for more than five years.
Business administration and support services also recorded a relatively low five-year survival rate of 32.7%, followed by retail at 34.5%.
Transport and storage sees lowest five-year survival rate
Transport and storage businesses recorded by far the lowest five-year survival rate of all sectors analysed, at 20.5%. This compares with 56.1% in the health sector, representing a gap of 35.6 percentage points between the highest and lowest-survival sectors.
The sector can be exposed to significant operating costs, including fuel, labour, vehicle and financing costs, which can leave smaller operators particularly vulnerable when costs rise or cash flow is disrupted.
Survival rates vary significantly across sectors
The analysis highlights how differently businesses can fare depending on the sector in which they operate. While more than half of businesses in health, property and education survived for five years, the figure falls below 40% for accommodation and food services, information and communication, retail, business administration, and transport and storage.
The figures suggest that the ability to navigate the first five years of trading can vary considerably depending on the underlying economics of a sector, including operating costs, margins, demand and exposure to changes in consumer or business spending.
Richard Hunt, Director at Liquidation Centre, comments on the data and the financial pressures that businesses face: “Retail is a tough sector to run a business in, and these figures show just how hard it can be to reach that five-year mark. Only 34.5% of retail businesses do. When margins are already tight, a rise in costs or a quieter trading period can have a real impact. A shop can be making sales every day and still struggle to pay its bills on time if too much cash is tied up in stock or expenses are rising faster than income.
“The warning signs won’t look the same for every business, but keeping a close eye on cash flow and knowing where your money is going matters in any sector. If paying suppliers or covering regular costs is becoming difficult, it’s better to get advice early, while there are still options available.”