U.K. Turnaround And Restructuring Update: December 2025

2025 has been characterised by significant geopolitical adjustments, which have reinforced how such macroeconomic shifts are now central to business disruption, rather than simply background noise.

I have seen that the most resilient organisations to emerge from this period are those that can pivot quickly, communicate transparently, and empower their teams to move forward despite such uncertainty. Agility and scenario planning are not just best practices – they're essential survival skills in a world where elections and policy shifts can upend the status quo overnight.

Of course, the impacts of economic policy and overall market conditions ripple through to consumers, too. We expect only a modest increase above inflation in spending in the U.K. in the run-up to Christmas and our 2026 Global Consumer Outlook , released earlier this month, suggests that consumer sentiment – and associated spending – will once again remain constrained for the year ahead.

This presents challenges for consumer-facing businesses as they compete for increased share of tightened wallets. While grocery may hold relatively firm, we see threats emerging for operators in the hospitality, travel, and non-food retail sectors. Unlocking like-for-like volume growth in a suppressed retail market will require a "turnaround mindset" to ensure success in 2026.

TEAM GROWTH AND MARKET RECOGNITION

More broadly, we have seen the restructuring market pick up quite significantly during Q4, reflecting these global macro trends and more localised headwinds. Beyond the U.K., debt refinancing pressures continue to rise, and are particularly pronounced in the chemicals sector, where a €3.4 billion maturity wall looms large for next year.

In addition, November's Cost Inflation Outlook presents a mixed picture for input costs across industries, challenging traditional procurement approaches and demanding new strategies for cost management, risk mitigation, and competitive advantage.

Disruption remains a perennial problem for business leaders to respond to, even if the specific sources may shift from one year to the next.

TEAM GROWTH AND MARKET RECOGNITION

As 2025 draws to a close, we were thrilled to receive industry recognition at the annual IFT awards for Large Turnaround of the Year, in relation to our work with SGS. This is the second year in a row that we have secured this accolade, following 2024's victory for our engagement with Four Seasons Healthcare. My congratulations go out to all of the team involved.

Looking forward, another challenging yet exciting year is ahead of us, and we continue to expand and develop our team to bring the very best of our firm to the clients we serve every day.

To that end, I am delighted to celebrate annual promotions within AlixPartners' U.K. TRS community, with Richard Harrison transitioning to Partner & Managing Director, and Chris Duffy and Steve Maskell stepping into Partner roles. Anneka Brown, Alison Curry, Alex Godfrey, Victoria Maitland, Gemma Smith, and Luke Stephenson have also been promoted to Director, with all effective from 1 January 2026.

As always, I hope you find this edition informative. Please get in touch with myself or the wider team if you would like to discuss any of the themes raised in this issue, and I wish you all the very best for the holiday season ahead.

IN THIS EDITION:

• Post-budget industry perspectives
• Consolidation on the horizon for U.K. altnets?
• Disruption and distress in U.K. Higher Education

Post-budget perspectives from our industry leaders

Retail

Matt Clark
Partner and Managing Director

The timing and execution of this Budget remains a significant challenge for the retail industry. While there were no major surprises this year, consumer and business confidence – already unsettled by weeks of speculation – remains low.

Consumers face a very mixed picture. Lower-income consumers, especially those on welfare, will feel most positive and therefore more willing to part with their money, while middle- and higher-income consumers will feel more reluctant as they navigate the effects of the freeze on tax thresholds, the cap on salary-sacrifice pension contributions, and the smorgasbord of additional tax increases. As a result, retailers are likely to see a differentiated response in discretionary spending based on their target customer: value-led retailers may see an uptick in sales, while those in the more premium space could see a dip.

From a retailer perspective, it was a relief that most the measures in the Budget were heavily anticipated: 'no surprise' being a good outcome. Small-store retailers will welcome the drop in business rates, although the additional business rates on large stores will hit supermarkets and anchor stores in malls. As many large-store retail businesses tend to operate with lower margins, this could lead to closures and further impact on footfall where those stores exists. Additionally, the slightly unexpected 8% increase in the youth National Living Wage will cause all retailers to reconsider whether they hire younger employees, who make up a significant proportion of the workforce – especially given the impact of the Employment Rights Bill. Retailers may find themselves accelerating automation options, with fewer younger people finding their first job in the sector as a result.

Hospitality and Leisure

Graeme Smith
Partner and Managing Director

The Budget brought mixed news for the hospitality space. The reduction of business rates for smaller properties will undoubtedly be welcomed by the industry. However, increases to the National Minimum Wage and a new tourism tax come at a time when the hospitality industry is already under significant pressure.

The sector has been grappling with cost and tax changes introduced in April, alongside rising consumer uncertainty – an issue unlikely to ease following the announcement of further consumer tax hikes.

While hospitality has demonstrated resilience through recent years of disruption, that resilience is being tested like never before. Operators are now likely to face higher labour costs and continued input cost inflation from their supply chain. In response, operators will need to reassess pricing, menus, and workforce planning without pushing prices beyond what consumers can absorb in an already challenging economic period.

All of this may lead to further restructurings as companies move to reduce costs and central overheads and exit uneconomic sites. In this environment, it is critical for businesses to identify the actions that matter most – and where to take them – to mitigate the additional financial burden and safeguard long-term competitiveness.

Automotive

Andrew Bergbaum
Partner and Managing Director

The Budget delivered a complex mix of measures for an automotive industry already navigating intense disruption.

While the continued freeze on fuel duty, expansion of the electric car grant, and increase in the ECS threshold for electric vehicles offered welcome news, the Budget fell short of the boost many had hoped for. A significant rise in Vehicle Excise Duty brings bad news for consumers and the industry alike, while the proposed 'pay-per-mile' scheme risks tempering momentum in EV sales at a time when the U.K. market remains fragile and the industry is striving to meet Net Zero targets.

Notably, the higher tax rate for battery electric vehicles compared to the rate for plug-in hybrids could incentivise hybrid purchases over fully electric models – potentially shifting consumer behaviour in the months ahead. These changes will shape how businesses plan, invest, and engage with consumers, with policies affecting electrification costs set to redefine adoption patterns and prompt strategic reviews across the sector.

Against this backdrop, the industry faces a delicate balancing act: managing disruption while accelerating the transition to electrification. U.K. manufacturers continue to grapple with high energy costs, skills shortages, and supply chain fragility. To remain competitive, leaders must prioritise targeted skills investment, operational efficiency, and modernised manufacturing practices.

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