Why Are So Many Businesses Still Going Bust? Looking Beyond the Insolvency Statistics

Why are so many businesses still going bust? The article argues the story is about why, not merely counting failures. In the last fifteen years, the economic landscape has shifted dramatically. Crisis after crisis—from the global financial crisis to Brexit, COVID-19, and energy shocks tied to the Ukraine conflict—have remade markets. Inflation and higher interest rates, paired with changing consumer habits, have squeezed margins across sectors. Costs have risen across wages, taxes, insurance, energy, borrowing, rent, and raw materials, squeezing profits. Many firms could not pass all increases to customers, eroding margins further. Meanwhile, consumers shop online, compare prices and demand faster delivery, reshaping retail, hospitality and beyond. As a result, even viable businesses can falter under simultaneous pressures, not only during recessions. Borrowing became markedly more expensive after a long era of cheap money, pushing stressed firms toward the brink. Labor shortages in hospitality, social care, construction, agriculture and transport have raised wages and constrained growth. The article notes that some firms adapt successfully while others lag, underscoring that strategy matters as much as macro conditions. In sum, insolvency statistics reveal only part of the story; understanding failures requires decoding evolving markets, costs, and competition.