UK listed retailers issued seven profit warnings during Q2 2025, more than double the amount recorded in the previous quarter, according to EY Parthenon’s latest Profit Warnings report released today (July 21).
FTSE Retailers companies issued four profit warnings during the second quarter. However, when combined with the FTSE Personal Care, Drug and Grocery sector, which includes supermarkets, there were seven warnings from listed retailers in Q2
Despite this increase, in the first half of 2025, FTSE Retailers issued a total of six profit warnings, a significant fall from the 12 warnings issued during the same period last year.
Silvia Rindone, EY Partner and UK&I Retail Lead, said, “Profit warnings among listed retailers rose sharply in the second quarter, with the seven alerts more than twice the number recorded during Q1.
"This 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.
“Despite ongoing pressures, including the rise in National Insurance Contributions and the National Living Wage, alongside tariffs, investment in technology including AI remains essential.
"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.”
Policy change and geopolitical uncertainty are leading factors for profit warnings
Nationally, in Q2 2025, the number of profit warnings issued by UK-listed companies rose by 20 per cent to 59 compared to 49 in the same period last year. Over the last 12 months, nearly a fifth (19 per cent) of UK-listed businesses have issued at least one profit warning.
The leading factor behind profit warnings during the second quarter was policy change and geopolitical uncertainty, cited in nearly half (46 per cent) of warnings. This marked a significant increase from just 4 per cent in Q2 2024, and the highest percentage recorded for this cause in more than 25 years of EY’s analysis.
The proportion of profit warnings to cite contract and order cancellations or delays in Q2 remained at a record 40 per cent . One in three warnings (34 per cent) cited tariff-related impacts, including weaker demand, supply chain disruption, and exchange-rate volatility.
Jo Robinson, EY-Parthenon Partner and UK&I Turnaround and Restructuring Strategy Leader, added, “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. These pressures are often interlinked and, combined, they are having a significant effect on companies’ confidence, decision-making and spending.
“Whether the rise in profit warnings is cyclical or structural remains to be seen, and we still expect earnings pressure to ebb and flow with the macroeconomic backdrop. As companies operate in a risk and forecasting environment that is challenging to navigate, they must adopt a measured, scenario-based approach that balances both agility and strategic clarity.”