Highstreet retailer Wilko has collapsed into administration leaving 12,000 staff with uncertain futures.
A Wilko spokesperson has said all stores remain open as usual for now and staff will continue to work and be paid.
However, the chain has not yet been able to secure enough investment to be saved.
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Wilko is the most recent casualty of a dip in consumer spending power, according to Tom Davey, director at litigation finance broker Factor Risk Management.
Speaking to HR magazine, he said: “Rising prices and high mortgage rates have had a nasty knock-on effect for the retail industry, particularly given that after a torrid period during the pandemic, and with continued supply issues, many retailers are struggling to survive.”
Davey said there will likely be an increasing number of high profile companies being forced into administration.
He said: “For companies such as Wilko, cheap capital has all but disappeared in recent years, and this has contributed to the steep rise in both corporate and personal insolvencies.
“The cost of managing inflation will be paid for by individuals and struggling corporations who have survived on cheap credit, and insolvency figures are only likely to worsen as a result of these tough economic conditions.”
The number of people in employment fell by 120,000 between March and June 2023 and the Trades Union Congress (TUC) has warned Britain is on the brink of a recession.
TUC analysis of official payroll statistics showed 11 of the main 20 industries in the UK are affected by a fall in the number of full-time payrolled employees.
Wholesale and retail was hard hit, with 27,000 jobs lost.
Paul Nowak, general secretary of the TUC, warned more jobs would be put at risk if interest rates continue to rise.
He said: “Ministers must stop hiding behind the Bank of England and come up with a credible plan for boosting jobs and living standards.
“With the country teetering on the brink of recession, the last thing we need is another hike in interest rates. This will just heap further misery on households and businesses and put many thousands more jobs and livelihoods at risk.”