The IFT Quarterly Update Q3 2025: increase in retail and casual dining turnaround and restructuring activity as cost pressures and Budget uncertainty weigh on businesses

IFT survey data showed a mixed picture for turnaround and restructuring activity in Q3 2025.  50% of IFT survey respondents saw an increase in turnaround/restructuring activity in the quarter, and the rest about the same level. The busiest sectors for IFT partners in terms of turnaround and restructuring activity in Q3 2025 were jointly retail and casual dining, noted as busy by 50% of respondents. These were followed jointly by the automotive, construction, energy and technology sectors, referenced by a third of respondents.

The jump in demand for turnaround and restructuring support from consumer-facing sectors like retail and casual dining may show businesses seeking to manage the impact of ongoing cost-of-living pressures and policy uncertainty weighing on consumer demand. We can also see the ongoing impact of demand pressures, supply chain volatility and inflationary issues in continuing demand from the energy and construction sectors, with the widely publicised cyber-attack on Jaguar Land Rover also potentially motivating more turnaround activity in the automotive sector.

According to FRP Advisory data, across all UK regions in Q3 2025 there were 5943 insolvencies. This represented a fall of 11% compared to the Q2 2025 figure (revised figure of 6669), continuing a downward trend in insolvencies over the last year. Interestingly, there was also a very small decrease in numbers of distressed companies in the FRP data to 184,544 for Q3 2025, a 0.7% decrease on the Q2 figure of 185,851, though broadly we can say that distress remained running at a similar level.

Construction, accommodation and food service activities and administrative and support service activities remained the sectors with the highest number of insolvencies for Q3 2025, as has been the case throughout 2025.  Construction and professional, scientific and technical activities remained the top two distressed sectors (as in Q1 2025); with real estate remaining the third-most distressed sector as it had been in Q2, which may be reflecting a difficult debt and market environment in both supply and demand terms for this sector.

Q3 of 2025 saw disappointing growth figures of 0.1% for UK GDP, increased inflation and was largely overshadowed by the Budget. When asked for additional comments as to what they are seeing in the market, half of our IFT partners respondents highlighted the business focus in Q3 being on the decisions from the upcoming Budget, giving the quarter a somewhat “wait and see” feel. With the Budget now delivered and with a series of smaller tax rises rather than fewer, larger increases as was expected in recent months, it will be interesting to see how various sectors respond over Q4 and into 2026.

You can find our IFT Q3 2025 snapshot here.