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When a new business, perhaps one still struggling to find its footing, finds itself in financial trouble, we can usually point to a few factors. Not the least of these being the relative youth of the business, particularly when it is trying to gain a foothold in a difficult market. A new business, or niche one, can be vulnerable to a lot of unforeseen pressure. In fact, we have seen that happen so often that we have a section of support on our site to help.
NCP, however, is hardly what we would usually think of as ‘fragile’. Originally founded in 1931 by Colonel Frederick Lucas, who presumably recognised the rise in personal motoring as a long-term opportunity, the company expanded significantly over the decades. Since 2017, NCP has been owned by Japan-based Park24, in conjunction with the government-backed Development Bank of Japan. What started as a simple parking operation had made the transition into part of a global concern.
NCP, in its prime at least, operated as part of our daily lives. It was established, recognisable and embedded in the infrastructure of British towns and cities. Whether it was a quick trip into town, a commute into the city, parking near a station, or an overnight for a hotel stay, the brand was familiar, dependable, and trusted.
In many ways, NCP was the perfect example of a popular brand. Recognised as a market leader and relied upon by millions.
Yet, despite all of that, it has fallen into administration, raising the question of how that happened to a brand that has literally been around since the rise of personal motoring.
Well, frankly, the ‘why’ of their troubles could be a demonstration of just how quickly circumstances can change when a business model no longer aligns with the world around it.
Perhaps the clue is in the previous chapter. Perhaps the long-term opportunity that started NCP has suddenly changed?
In explaining the situation, NCP pointed to a combination of factors that will feel familiar to many UK businesses. The company cited “a decline in demand” and a “subdued” recovery following the pandemic, alongside rising operational costs driven by inflation and energy prices.
On the surface, while difficult, those are the same challenges many organisations have faced in recent years. In NCP’s case, then they could arguably expose something deeper.
Was there perhaps an underlying fragility in the business model itself?
Administrators also highlighted “continued shifts in commuting and customer driving patterns”, a subtle but important acknowledgement that this was not simply a short-term downturn.
They clearly understood that the market had changed, so what happened, and why did they not adapt to the new world around them?
The consumer motoring organisations were quick to respond to the news. The RAC were relatively generous, reflecting on the broader trends affecting drivers, noted that “the way people use their cars has fundamentally shifted since the pandemic, particularly with fewer regular commuters and more flexible travel habits.”
The AA pointed to changing consumer expectations, observing that drivers are increasingly seeking convenience, flexibility and value in where and how they park, factors that traditional operators have sometimes struggled to match. They also mentioned the size of car park spaces, and highlighted the ‘extortionate’ prices that had resulted in some drivers preferring to risk a fine rather than use the car parks.
So, while consumers may well have recognised and trusted NCP as a brand, there was little loyalty. In the end, that recognition seems not to have translated into liking them or preferring them as the location of choice.
Looking at this from the outside, it feels like a classic example of a business caught between its past and the demands of the present.
NCP was tied into long-term leases on sites that once made perfect sense. Busy town centres, high-footfall locations, commuter-heavy areas, and so on, all of which demanded parking. As several sectors, and certainly hospitality and retail, will testify, those same locations no longer generate the same level of demand.
Town centres are not as busy as they once were. Hybrid working has reduced commuting. There is no denying that online shopping has also changed how people buy goods. In the same way, newer, more flexible parking options have emerged that are often easier to use and, crucially, in a competitive market, more responsive to customer expectations. What used to be practically a monopoly fed by the demand for a town centre parking space had become vulnerable to more open choices and flexible options for drivers.
The AA summed up this shift in stark terms, noting that customers had effectively “voted with their wheels”, adding that NCP “didn't keep up with the changing world of more flexible and app-based local parking.”
One of the most difficult positions any business can find itself in is if demand begins to shift, but the cost base does not.
That appears to have been the case here. NCP’s structure meant it was committed to long-term agreements in often high-value locations. As usage declined, those fixed costs became increasingly difficult to sustain.
This is a pattern we see frequently in insolvency situations. The issue is sometimes not a single shock moment of revelation but more a gradual rift that builds between how a business operates and what the customers want.
What seems to have happened in terms of the changes affecting NCP is not unique to parking.
They reflect broader shifts in behaviour:
These are not temporary disruptions to be waited out. They are fundamental, long-term changes. The truth is that any business that is built around specific patterns of customer behaviour can become increasingly, perhaps even unavoidably, reliant on them. Those behaviours provide core sources of revenue and underpin the business model. As we often see in insolvency cases, reliance on consumer behaviours, while sound in theory and seemingly reliable in terms of cashflow forecasting, also means a business is at risk should those patterns change.
There is often a perception that scale provides protection and that established businesses, with strong brand recognition and a wide footprint, are more resilient.
In reality, scale can sometimes do the opposite.
For NCP, its size clearly made it harder for the organisation to pivot. Hundreds of sites, long-term commitments and a legacy operating model created a level of inertia that limited how quickly it could respond.
In situations like this, what was once a strength becomes a constraint.
There are some clear takeaways here, particularly for businesses operating in sectors facing similar pressures:
These are not abstract ideas. They are currently playing out in real time across multiple industries and, sadly, resulting in the closure of many businesses.
It is impossible, as outside observers, to see the NCP collapse from all angles. However, even accepting that, from the outside at least, the lesson to be learned is a simple but very important one.
Businesses need to adapt and change quickly. If they don’t, no matter how well established they are, they can fail and often far more quickly than expected.
This is not a lesson about size or reputation; this is a lesson about staying on top of the market. Sadly, for those who will need to deal with the fall from lost jobs, the truth is that NCP may have taken the only option open to them. It seems that, in its current state, it was simply not a viable business. Hopefully, a rescue deal or similar will be achieved, and the NCP situation will work out for those affected.
To be fair to NCP, there is a second lesson here, and a very important one. If a business has done everything practical to adapt, but the numbers are still pointing the wrong way, hanging on and hoping for the best is unlikely to work. If the reality is insolvency, then taking action, no matter how unwanted that action may be, is always the best option.
In the end, it is not history, or brand recognition, or size that protects a business from a changing consumer landscape, it is its ability to remain relevant to the customers. If that isn’t possible, then its directors must accept the inevitable. That is a universal truth, no matter how large or small the business.