Retail profit warnings more than doubled in the second quarter as the industry grapples with rising wage costs and falling consumer demand, according to new data from EY-Parthenon.
The report reveals that seven UK-listed retailers, including supermarkets, issued profit warnings between April and June — up from just three in the same period last year.
EY partner Silvia Rindone told the Evening Standard the spike “highlights both softening consumer demand and the deeper structural headwinds facing the sector”.
“Retailers we speak to tell us that falling sales are currently indicative of a longer-term shift, with consumers becoming more value-focused and less brand-loyal, which leaves cost-pressured retailers in a bind,” she explained.
The report also attributes the rise in alerts to April’s hike in National Insurance Contributions and the increased minimum wage, which have added further cost pressure across the sector.
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Overall, profit warnings across UK-listed companies rose 20% year-on-year to 59 in the second quarter. A record proportion of those cited policy change and geopolitical uncertainty as the primary factor — mentioned in 46% of alerts, up from just 4% a year earlier.
More than one in three (34%) warnings flagged tariff-related impacts such as supply chain disruption and currency volatility. Meanwhile, 40% of all profit warnings cited delays or cancellations of contracts or orders — matching a record high.
Jo Robinson, EY-Parthenon partner and turnaround and restructuring strategy leader, said: “The latest profit warnings data reflects the scale of persistent uncertainty and how heavy it continues to weigh on UK businesses.
“While this uncertainty has been a recurring theme since mid-2024, it has intensified so far this year – driven largely by geopolitical tensions and policy shifts – compounding pressure on both earnings and forecasts.
“While the announcement of global tariffs has clearly played a part in amplifying uncertainty, they are just one factor among broader geopolitical and policy upheaval.”
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