The saddest thing for me is to see a business closing. I’ve spoken to many owners lately—some on the verge of putting the key in the door for the last time—and it is never a “nice” thing. You get used to the owners and the staff; they become integral to your life, whether they are supplying your home, supporting your hobbies, or fueling your own enterprise. I take no delight in writing about business failures, but they are a stark reality.
In an economy suffering from the “Other Big Five”—electricity, water, rates and taxes, fuel prices, and heavy medical costs—the burden on business is enormous. As the cost of living has risen, consumers have understandably cut back their spending, leaving businesses squeezed from both ends.
The Reality in Numbers
The numbers for the start of 2026 reflect this squeeze. According to Statistics South Africa (Stats SA), the year began with 96 business liquidations in January, followed by a jump to 135 in February. While the total of 231 closures for those two months is staggering, it is actually a slight slowing of the pace compared to last year.
February’s 135 closures represent a 3.6% decrease from the 140 seen in February 2025. In fact, the year-to-date figures through February are down about 6.1% overall. However, a “decrease” in failures doesn’t mean the pressure has eased; it just means fewer businesses are reaching the final breaking point—for now.
The Rental and Regulatory Trap
On a recent drive to a small center in Kenilworth, I noticed yet another shop had shut its doors. The rentals in that area are staggeringly, even obscenely, high. You can see the name of the business in the photograph; it’s a tragedy that it’s gone. For a small business, it isn’t just the administered prices being jacked up by central government and municipalities that kill the dream—it’s also landlords pushing up rentals.
(By the way, someone whispered in my ear that the costs there are so high others are looking for new premises, but you didn’t hear that from me.)
This local struggle in Kenilworth mirrors the national data. In 2025, Stats SA reported a total of 1,534 liquidations, and the sectors hit hardest were finance, insurance, real estate, and trade. These are the very sectors where high rentals and “The Big Five” costs eat through margins the fastest.
The “Why” Behind the Winding Up
There will always be casualties, especially in the first few years of trading. However, there are also “valid” reasons for closing. Sometimes an owner reaches retirement age and wants out, but because they have no established “goodwill” or a business system that works independently of them, they can’t sell. Of the 1,534 closures in 2025, the vast majority—1,341—were voluntary liquidations.
This tells us that many owners are simply choosing to “call it quits” before the creditors force their hand. They find themselves with a customer list that won’t sell and a job they’ve worked for 40 years that has no exit strategy.
Then, of course, there are the overheads. Rental is a killer, and so is labor. Labor has become increasingly expensive under our semi-socialist regime. Unlike in America, where you can “hire and fire” with relative ease, our ironclad labor laws mean it costs an arm and a leg to get rid of a “bad apple.” This legal burden likely contributes to the 193 compulsory liquidations we saw last year, where the courts had to step in because the business could no longer manage its debts or obligations.
Looking Ahead
As of mid-April, we are still waiting for the official March 2026 figures from Stats SA. Early reports suggest we were nearing 300 total closures by the end of February if you include deregistrations. If March follows the trend of the previous year, the total Q1 2026 figure will likely sit just under the 373 liquidations recorded in Q1 2025.
It is a “quieter” start to the year in terms of volume, but for the staff and owners of those 231 businesses that have already folded, “quiet” is the last word they would use. We’ll look at these numbers again later in the year, but for now, the focus must remain on how to keep your business going in these hard times.
