Over 37,000 West Midlands shops and businesses now in 'significant distress' - with 'no end in sight'
Over 37,000 businesses are in serious trouble in the West Midlands, according to new figures released this week.
A total of 37,898 businesses in the region are reportedly in "significant" levels of distress in the second quarter of 2025, a shocking rise of 7.4 per cent from the same period in 2024.
And financial experts at consultants Begbies Traynor say more firms are likely to collapse, with "no end in sight" to the nation's economic woes.
Walsall once again appears to have been the hardest hit town in the region, with 1,475 businesses now in significant distress, a rise of over 13 per cent. In Wolverhampton, 1,997 firms are on the endagered list, a rise of just over 4 per cent.
According to figures in the firm's 'Red Flag' report released this week, construction companies have been the hardest hit, with an increase in distressed businesses of around 25 per cent for the sector, followed by real estate and property firms.
The report comes on the back of Government statistics released in March, which showed that over 25,000 businesses had gone to the wall in the West Midlands over the past year.
Over the last 12 months, consumer-facing industries have continued to experience some of the most extreme rises in 'critical' financial distress, with bars and restaurants up by 41.7per cent, travel and tourism firms up by 39 per cent and general retailers up by 17.8 per cent.
It's been a rocky few months for retail businesses in the region in particular, with High Street giant Marks & Spencer's announcement that it was set to close its flagship Wolverhampton store greeted with shock by Black Country shoppers in June.
Willenhall-based Poundland has put over 1,300 jobs at risk after announcing plans to close stores and a regional distribution centre, as part of a recovery plan following the sale of the business.
And a shock announcement also saw Dudley's Very Light Rail Innovation Centre tumble into administration last month, although a deal has now been agreed which will see the business saved.
Across the wider Midlands more than 80,000 companies are now classed as being in ‘significant’ economic distress, a year-on-year increase of 7.6%. Nationally, the latest Red Flag Alert research for Q2 2025 recorded 666,876 businesses in significant distress, a 10.8% increase year-on-year.
"Financial distress has intensified over the past twelve months in every corner of the economy. This means businesses across the UK are facing significant headwinds and many will have to review where they can tighten their budgets or restructure to give themselves more stability in the immediate future," said Julie Palmer, Partner at Begbies Traynor.
"This time last year, there was a degree of optimism amongst business leaders who were hoping to see a shift in fortunes in the second half of the year, but fast-forward 12 months and confidence is in short supply.
"Households are still grappling with their finances, and this is keeping consumer confidence volatile. The knock-on effect of this is clear to see in the consumer-facing sectors where margins are thin, growth is hard to come by, and the impact of higher employee costs is pushing many businesses to the brink of collapse.
"So, it is of no surprise to me that while larger pub groups might be performing well, by squeezing out extra efficiencies to counteract onerous price rises, many independent players won't have the scale to withstand the pressures of this environment for another 12 months if nothing improves.
"In the face of these headwinds, a large proportion of the 50,000 businesses currently in 'critical' financial distress need to urgently investigate their options if they are going to weather the storm.
"With no end in sight to the current economic malaise, I fear the financial burdens companies are enduring at present are simply too high for many not to avoid collapse."
