Insolvencies in the retail sector jumped by almost 25 per cent in the first quarter of this year, as an average of seven businesses a day went to the wall, according to new figures from PricewaterhouseCoopers (PwC).

Retailers such as Woolworths, Stylo, Land of Leather and Karen Millen were among the 705 companies that went bust in the retail sector between January and March, up 24 per cent on the previous quarter and a 60 per cent rise on last year’s first quarter.

Andrew Garbutt, retail director at PwC, said: “In 2008 we saw relatively weak retailers going to the wall. However, survival of the fittest will be the mantra for 2009 — those with an inappropriate capital structure or poor proposition will struggle to survive. Even good companies may disappear, as they are exposed by low sales volumes and debt burdens.”

Another sector that has been struggling is hotels.

According to PwC’s data, the number of hotel insolvencies in the first quarter rose by almost 20 per cent on the previous quarter and by 188 per cent on a year-on-year basis.

A total of 46 hotel businesses fell into the hands of administrators during the quarter, the biggest of which was the quoted Real Hotel Company. Most of the 40 hotels operated by the company have found a new home, with the leases on three Purple Hotels being taken over by Travelodge.

Another casualty was the parent company of the Four Pillars group, which collapsed after its estimated £90 million debt burden became unsustainable. Its five freehold hotles are now being offered for sale by PwC, the administrator.

Stephen Broome, director of hospitality and leisure for PwC, said it was clear that the sector was “in for a rough ride over 2009” and he expected a mixture of both individual hotels and bigger groups to fall by the wayside, although he felt that the banks behind some of the bigger chains would seek to avoid insolvency by pursuing alternative forms of restructuring.

Mr Broome said: “Many hotel groups have seen the benefit of December trading, which, despite the downturn, will still have provided some Christmas cheer. With the quieter months of January and February now a distant memory, many UK hotels hope for survival through to the summer, when hopes are pinned on a revival of demand from domestic holiday visitors.”

However, statistics from PwC provide little comfort. A consumer poll conducted over Easter showed that consumers are looking to other forms of accommodation to save money. The poll showed a 12 per cent rise in those choosing to go camping, caravaning or to a holiday park.

Mr Broome added: “While current exchange rates should encourage travellers from abroad to visit and may mitigate some of the effects of a post-Budget fall in consumer confidence, the prospect of a sunny summer is unlikely to provide much shelter from the storm for hotels.”

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