The number of profit warnings issued by FTSE retailers has doubled over the second quarter of 2025, as uncertainty over tariffs and geopolitical forces was compounded by government policy shifts.
London-listed retailers issued seven profit warnings in the three months to 30 June 2025, up from three in the first quarter, according to EY-Parthenon’s latest profit warnings report.
Three of the profit warnings came from personal care, drug and grocery stores – a sector which only saw four warnings in all of 2024.
Businesses across the UK showed signs of strain, with the number of profit warnings issued by London-listed companies across all sectors rising 20% year on year to 59. Over the past 12 months, nearly a fifth (19%) of listed companies have issued at least one profit warning.
Wholesaler Kitwave and retail bakery Greggs were among the latest to warn investors of downgraded profit expectations.
Silvia Rindone, UK&I retail lead and partner at EY, said the spike in warnings was down to weakening consumer demand and deep 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 said.
Retailers must continue to invest in technology, including AI, she added, despite the pressures from rising input costs like National Insurance contributions, an improved national living wage and higher tariffs.
“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. These pressures are often interlinked and, combined, they are having a significant effect on companies’ confidence, decision-making and spending,” said Jo Robinson, EY-Parthenon partner and UK&I turnaround and restructuring strategy leader.
The number of warnings from companies across all sectors citing geopolitical uncertainty or shifting policy shot up to 46% in Q2, with a record 40% also citing delayed or cancelled orders.
Rindone added: “The winners will be those who get the basics right, such as range, service and pricing, whilst continuing to build for the future with leaner models, sharper propositions, and digital resilience.”
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