TL;DR: Insolvencies in Ireland have held steady this year, with notable spikes in the retail sector, which has seen a 35% increase. Dublin continues to lead in corporate insolvencies, while hospitality shows signs of stabilization, albeit with some notable closures.
Despite an overall consistent level of corporate insolvencies in the first half of the year, the retail sector has dealt a significant blow, experiencing a 35% rise in insolvencies. During the second quarter alone, 232 corporate insolvencies were documented, bringing the first half total to 444—slightly up from 436 during the same period last year. According to PwC, the average insolvency rate remains at approximately 27 per 10,000 businesses, translating to nearly 900 insolvencies annually.
Dublin has unsurprisingly emerged as the hotbed for corporate failures, accounting for 219 of the 444 recorded. Meanwhile, cities like Cork and Galway contribute 47 and 36 insolvencies, respectively. Specifically, the retail sector has reported 109 insolvencies, up from 81 last year. This increase paints a stark picture of an industry grappling with evolving consumer habits and relentless competition.
On a brighter note, the hospitality sector recorded 60 insolvencies, down from 81 last year. This slight decline suggests some stabilisation in an industry that has faced its fair share of obstacles, including rising costs and shifting demand patterns post-pandemic. However, this downturn comes just ahead of the reintroduction of a reduced VAT rate of 9% for restaurants, set to take effect from July 1. While the tax break is aimed at lightening the load for operators, it’s estimated to cost the exchequer €232 million for the rest of the year, and €681 million over an entire year.
Additionally, various sectors such as professional, scientific, and technical activities, as well as construction and manufacturing, also reported insolvencies, with 56, 53, and 44 cases, respectively. Ken Tyrrell, a business recovery partner at PwC, remarked on the “remarkable steady level of insolvencies” over the last three years, showcasing a degree of resilience among Irish businesses.
That said, it’s not all sunshine and rainbows. Elevated costs in energy, transport, and wages have left many businesses—especially SMEs—grappling with cash flow challenges. Though inflation has moderated from peak levels, it still looms over margins and consumer spending, making it difficult for firms to adjust prices without losing customers. Perhaps in Ireland, it’s high time we heed the age-old adage: “A penny saved is a penny earned”—because these days, it’s more like “a euro saved is a euro fought for.”
Interestingly, the report also highlights a reduction in receivership appointments, dropping to 32 from last year’s 56. Lower enforcement levels might reflect an unexpected increase in lender patience—after all, no one wants to be the bad guy swooping in to reclaim debt during tough times.
In a land where innovation often rides the waves of adversity, only 11 examinerships and 16 Small Company Administrative Rescue Processes (Scarps) were recorded. The Scarp process, designed to aid viable small businesses in restructuring debt, continues to be underutilised, which is puzzling. Given that there were 70 court liquidations this year—up 23% from last year—perhaps it’s time we rethink how to support our local businesses.
Interestingly, as businesses face myriad challenges, it’s worth noting that since the dawn of the financial crisis in 2008, the phrase “your business can survive anything” has become somewhat of an ironic joke among Irish entrepreneurs. It seems they’ve encountered everything from foot-and-mouth disease to a global pandemic, yet they remain determined to thrive—one insolvency at a time.
