In what is proving to be an incredibly difficult year for businesses across the UK, the delivery company Tuffnells Parcels Express has recently declared bankruptcy. The company has collapsed as a result of fierce competition and a steady increase in costs which has made its means of doing things borderline impossible to keep up with. There have been a total of 2,000 job losses as a result of the bankruptcy, as was recently declared by administrators. Interpath Advisory, the administrators who have been brought in on behalf of the company, also confirmed that an inability to secure further funding has also been a contributing factor towards the business’s collapse.
Why Are Many Businesses Closing in 2023?
The news that a large organisation will be shutting its doors is becoming quite common in 2023. Simply put, this is because there are a number of challenges that are currently facing organisations this year that a lot of businesses haven’t prepared for. There is a constant need to change and adapt and if a business is caught flat-footed, the ramifications can be quite serious. The likes of coming out of COVID-19, Brexit and the war in Ukraine are all having a detrimental impact on the UK economy.
What Are Some of the Common Issues Facing Businesses This Year?
The issues that face a business are going to be unique depending on the market that that business operates in and its current situation in terms of finance and staffing. That being said, some of the more common issues that apply universally include:
- Supply Chains
Thanks to rising costs, the majority of businesses’ supply chains are seeing some form of disruption. This means that it is harder for an organisation to get their hands on fast and affordable materials and goods, meaning turning a profit becomes a longer, more drawn-out ordeal. There are also labour shortages which are contributing towards the problem as a lot of people are looking to leave their current roles in pursuit of better opportunities. Thanks to the normalisation of working from home, a lot of people are looking for jobs that they might not have previously been able to apply for due to location.
There are also disruptions to international trade which will get in the way of a business’s success as well. A lot of countries are seeing increased storage fees and shortages of raw materials, which once again will be a driving factor towards the disruption for UK supply chains.
- Increased Energy Prices
A common talking point throughout the year has been about the increasing energy prices. This is a problem for households across the UK but is also proving to be an issue for businesses up and down the country as well. Throughout 2023, energy prices have risen sharply in cost and this is expected to continue. When businesses have office space, keeping them heated in the winter and cool in the summer is non-negotiable, so this is simply an added expense. When businesses are already operating on a tight budget, these increased costs can be severely detrimental. A lot of organisations are looking at renewable energy as a solution but again, having solar panels fitted and generally implementing more renewable features can cost a significant amount too.
- Inflation
Inflation is also a massive challenge for businesses across the UK right now as well. There are a lot of banks who say inflation rates are likely going to drop soon but as they have continued to rise throughout 2023, the damage to a lot of businesses has already been done. As inflation rises, it becomes more difficult for businesses to turn a profit and for a lot of organisations that had thin margins anyway, this is enough to put an end to the business for good. World economies are steadily adapting but for lots of people, it’s already too little too late.
Who Are Tuffnells Parcels Express?
Tuffnells is a privately owned business which specialises in large and bulky goods. It’s located in Sheffield in the north of England and is responsible for delivering across the UK and the whole world.
What Happened at Tuffnells Parcels Express?
So, why is the company going bankrupt? The administrators, Interpath, commented recently saying, “In recent weeks, the financial position of the business was such that the company needed to seek additional financial support… After a number of options were explored, the directors took the difficult decision to seek the appointment of administrators.”
In light of not being able to obtain this additional financial support, the company will be making most of its staff completely redundant. However, 128 staff members are being kept on to help with the winding down of the business and the selling of its assets on behalf of creditors.
The company began suffering at the start of the pandemic and since then has struggled massively to get back on its feet. They claim that because of the fact the parcel delivery market in the UK is competitive at the moment, paired with inflation, the business is unable to cope and as such is being forced to shut down. Joint administrator Rick Harrison commented, “Regrettably, with deliveries suspended and with no prospect of them resuming in the immediate term, we have had to make the majority of staff redundant.”
Is Your Business Struggling?
If like a lot of businesses at the moment you find yourself struggling then it may be worth reaching out to organisations such as Leading UK who will be able to provide advice on the best way to move forward. Our team of experts will be able to discuss what your business does, where your problems are arising from and the most effective way that you can move forward in light of said problems. If you require any further information or have any questions then do not hesitate to get in touch.
