The number of online retailers facing 'significant' financial problems has risen by nearly a third, almost double the rate of increase among stores-based businesses.
The number of pure-play retailers with difficulties increased 28 per cent from 1,421 to 1,816 as the number of people trying to set up their own online business rose, according to the research from restructuring specialists Begbies Traynor.
Begbies Traynor partner Julie Palmer told the Financial Times: 'A flush of online start-ups, which are typically at higher risk of failure in the early stages of their life-cycles, has driven a significant rise in financial problems in non-store retailers.'
The number was dwarfed by the total number of stores-based retailers facing problems which rose 15 per cent to 15,792. More than 150 retailers face 'critical' financial woes, an 8 per cent rise compared to the final quarter of 2012.
But Begbies Traynor also said that some larger online and multi-channel competitors were putting pressure on smaller rivals because they were able to offer lower prices, click-and-collect options and pay for better search rankings.
Retailers have been discounting more heavily than usual this Christmas on and off-line in a bid to attract shoppers struggling with the higher cost of living and low wage increases. They are expected to continue to do so over the coming days.
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