The number of retail administrations fell in the last quarter however fears remain that Christmas could send a number of retailers out of business.

The number of retailers falling into administration in the third quarter of this year fell by 15% to 28 compared with 33 in the same period last year, according to research by Deloitte.

Deloitte warned that “the real test” would come in January and that the retail sector remains “fragile”.

Overall, the third quarter of 2012 saw a total of 395 companies falling into administration compared with 524 in the same period in 2011 - a decline of 25%. 

Deloitte restructuring partner Lee Manning said: “The decline in the number of retailers falling into administration is positive news.  With some notable exceptions, the trend in recent months has been for fewer household names to suffer financial distress. 

“As the year has gone on, low inflation has eased the pressure on consumers, particularly in the non-discretionary categories.”

He added: “However, whilst the pressure is easing, the retail sector is still fragile. The real test will come in January once the busy Christmas trading period is over. Forecasts for the festive period are mixed. The challenge will be for retailers not to discount too quickly or too deeply to ensure they generate sales at acceptable margins in order to provide a stable platform for trading into the first quarter of 2013,” said Manning.

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