UK-listed retailers issued seven profit warnings in the second quarter of 2025, more than double the number recorded in the previous quarter, according to EY-Parthenon’s latest Profit Warnings report. FTSE Retailers issued four profit warnings, while a further three came from the FTSE Personal Care, Drug and Grocery Stores sector, which includes supermarkets. This brings the total for listed retailers to seven in Q2 alone.
Despite this sharp quarterly rise, the total number of profit warnings for FTSE Retailers in the first half of 2025 is six—down from twelve during the same period in 2024. This suggests that while the second quarter has been difficult, the year as a whole may still be more stable than last.
Silvia Rindone, EY Partner and UK&I Retail Lead, explained that the increase in warnings reflects both weaker consumer demand and deeper structural challenges. She pointed to a noticeable shift in shopper behaviour, with consumers becoming more focused on value and less loyal to brands. This change leaves many retailers in a difficult position, especially with rising costs across the board.
Rindone also highlighted that despite current pressures—including higher National Insurance contributions, increased National Living Wage rates, and tariff costs—investment in technology such as AI remains vital. Retailers that focus on core strengths like product range, customer service, and pricing, while also building leaner, more digitally resilient models, are most likely to succeed.
Across the UK market, a total of 59 profit warnings were issued by UK-listed companies in Q2 2025, a 20% rise year-on-year. Almost half of these warnings—46%—cited policy change and geopolitical uncertainty as a key reason. That’s a significant jump from just 4% during the same period last year and the highest level recorded for this cause in more than 25 years of EY’s reporting.
Other leading causes of profit warnings included contract and order cancellations or delays, which were cited in 40% of cases, matching record highs. Additionally, 34% of warnings pointed to tariff-related issues, such as reduced demand, supply chain disruptions, and currency fluctuations.
Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader, said the data underlines how persistent uncertainty is putting pressure on businesses. Since mid-2024, policy changes and global tensions have made it more difficult for companies to forecast earnings and plan confidently. These challenges are closely linked, and together they are impacting decision-making across the board.
Robinson advised that companies should take a scenario-based approach to planning, combining strategic clarity with flexibility. It remains to be seen whether the rise in profit warnings signals a short-term cycle or a longer-term structural shift, but either way, organisations need to stay agile and prepared for further changes.