// About 48% of FTSE retailers warned on profits last year citing rising costs and falling consumer demand as the biggest factors
// FTSE retailers issued the highest number of warnings in 2022
Nearly half of UK listed retailers issued profit warnings in 2022, more than any other industry.
According to EY-Parthenon’s latest Profit Warning report, 48% of FTSE retailers warned on profits last year citing rising costs and weakened consumer demand as the biggest factors.
In total, 36% of FTSE companies in consumer-facing sectors flagged warnings last year including 60% of FTSE personal care, drug and grocery store retailers.
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Overall, profit warnings in the FTSE were up more than 50% against last year, with 305 sounded. Some 31 listed companies issuing their third consecutive profit warning in 12 months.
Out of those that warned on profits, 13% have gone through a restructuring process, 19% have breached covenants, and 25% have changed CEO or CFO as of mid-January 2023.
EY turnaround and restructuring strategy partner Sam Woodward said despite better-than-expected festive trading for many businesses, the bar was set low due to “exceptional levels” of consumer sector profit warnings in 2022.
“The golden quarter, a vital period for consumer companies, included a winter World Cup along with the disruption from train and postal strikes,” he said.
“This backdrop created a further complex layer of challenges and opportunities in addition to ongoing cost, labour, inventory, and confidence issues for consumer-facing companies.”
Woodward added that supermarkets appeared to have been the “main winners of Christmas 2022”.
Tesco and Sainsbury’s are some of the grocers which enjoyed bumper Christmas sales as shoppers stocked up on value items.
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