Retail insolvency falling but hospitality sector continues to feel the strain

Retail recorded 25 insolvencies for the first quarter of 2025, a 40% decrease compared to the same quarter in 2024 (42), and down 38% from Q4 2024 (40).

However, the hospitality sector remains under pressure, with 43 recorded insolvencies in the first quarter of 2025, a rate in line with 2024 figures. Some 26 restaurants, seven pubs, and three coffee shops were reported insolvent over the quarter. Hospitality has a current annual insolvency rate of 75 insolvencies per 10,000 companies – far higher than the overall rate of 29 insolvencies per 10,000 businesses.

“The issue in the industry is clearly about underlying profitability and not necessarily about unsustainable or historic debts. With these businesses going straight to liquidation, formal company rescue processes are not being utilised which indicates fundamental problems with the business model and underlying profitability,” the report said.

“The overall rate of insolvency in the hospitality industry is above the overall 20-year average insolvency level of 50 per 10,000 while most other sectors are currently well below historic insolvency levels. The statistics back up the well publicised issues that the industry is facing.” PwC’s Insolvency Barometer shows that the overall annual insolvency rate of 29 per 10,000 businesses is more than double the rate of 14 per 10,000 recorded in 2021 but below the 20-year average of 50 per 10,000 businesses, and far below the previous peak of 109 per 10,000 businesses recorded in 2012.

Ken Tyrrell, PwC Ireland business recovery partner, said the continued year on year decline in insolvencies demonstrates a robustness and resilience in the Irish economy but cautioned that geopolitical risks will add to the challenges in 2025. “Nothing is certain, and businesses will also need to deal with a higher cost base in 2025 driven by domestic and international factors,” said Mr Tyrrell. “I would advise businesses to focus on their core strategies, cost base and actively manage their working capital and cash positions to ensure that they are financially sustainable into the future.” Dublin recorded most insolvencies over the quarter (115), followed by Cork (13), Kildare (10), Galway (8), and Wexford (7).

There were five energy and utility insolvencies – this is a rate of 164 per 10,000 companies. There were 19 health insolvencies – a rate of 81 per 10,000 companies.

Receivership appointments increased by 57% in the first quarter of 2025 compared to the same quarter last year, with 36 and 23 appointments recorded respectively. Additionally, receivership appointments increased by over 70% compared to the 21 recorded in the final quarter of 2024, showing a significant rise in lender activity. Over the past six months, 20 different lenders have enforced on their debt through receivership.

There was one examinership recorded in the first quarter of 2025 and eight Small Company Administration Rescue Process (SCARPs). "The overall use of rescue processes remains lower than would be expected,” the report noted.

There were 25 court-appointed liquidations recorded in the first quarter of 2025, over three times the number compared to the same quarter in 2024 (seven). This shows an upward trend of court appointments since early 2024. Revenue is listed as the petitioner for 16 of the appointments in the first quarter of 2025, suggesting that a number of phased payment arrangements (PPAs) agreed at the cessation of the debt warehousing scheme – deferrals - have potentially failed, making enforcement action necessary to recover these debts.

There were 122 creditors’ voluntary liquidations (CVLs) recorded in the first quarter of 2025, a 33% decrease compared to the same quarter in 2024 (184) and the lowest number recorded since the first quarter of 2023 (119). CVLs remain the most common form of insolvency, accounting for more than three out of every five insolvencies in the quarter.

The average lifespan of companies declaring insolvency in quarter one of 2025 was just under 11 years, down from 13 years reported in PwC’s last Insolvency Barometer. The shortest-lived company was less than 2 years old, while the longest lifespan was almost 73 years.