Almost a third of large retailers and consumer goods companies have had their overdraft facilities cut in the last year, research from Roland Berger has revealed.

The resulting squeeze on working capital was hitting the food and drink sector particularly hard as cost inflation continued to filter through the supply chain.

Almost half (44%) of respondents to the Roland Berger survey of companies with a turnover of more than £250m, said it could force them to cut jobs, while 31% reported tighter banking covenants and shorter loan durations. The average interest rate on borrowings has increased 0.5 percentage points since last year.

“Many of grocery companies’ liquidity issues are caused by the banks,” said Tim Manasseh, consumer goods and retail partner at Roland Berger . “This is exacerbating the squeeze from cost inflation, retail price cuts and downtrading.”

Very few companies felt Government action to assist businesses was having an impact, he said. International suppliers based in the UK were particularly vulnerable because the strong euro was pushing up the cost of imports, he added.

He called for retailers and suppliers to support each other to ensure supply chains stayed robust.