Retail profit warnings more than double as high street pressures mount
The data showed that seven UK-listed retailers, including supermarkets, cut profit guidance between April and June.
Britain's retail sector has come under significant pressure since last autumn's Budget move to hike National Insurance Contributions (NICs) and the minimum wage, both taking effect in April.
But EY said the high street was also facing tough consumer spending challenges, with shoppers cutting back and focusing on value.
EY partner Silvia Rindone said the spike in retail warnings '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 said.
Tariff woes sparked by US President Donald Trump waging a trade war also featured heavily in the report, contributing to a rise in the number of alerts more widely across corporate plc.
The report found that the number of profit warnings issued by UK-listed companies rose by 20% to 59 in the second quarter compared with 49 a year ago.
The top factor was policy change and geopolitical uncertainty, cited in nearly half (46%) of all warnings – up from 4% a year earlier and the highest since the study was launched over 25 years ago.
Over one in three (34%) warnings flagged tariff-related impacts, such as weaker demand, supply chain disruption and volatility in currency movements.
The proportion of warnings to cite contract and order cancellations or delays remained at a record high of 40% in the quarter.
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.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
14 minutes ago
- The Sun
Range Rover to remove convenient feature for next-gen model as designer bizarrely calls it ‘dirty'
THE ELECTRIC Range Rover will not feature a front trunk, according to the designer of the hotly anticipated SUV. The vehicle is yet to officially debut, with only teasers of its design revealed so far - although fans will be pleased to know the EV version closely mirrors that of the combustion-engine model. 4 4 But one convenient feature found in many electric vehicles won't be included - in a decision partly based on customer feedback. The car's designer, Lynfel Owen, recently referred to the front of the car as the "dirtiest part" and questioned why anyone would want to lean against it to use a front trunk. In an interview with CarExpert, Owen said: 'Why would I want to lean against the dirtiest part of the car to put stuff in?' He explained his reasoning in greater detail: 'We spoke to our customers… none of them have an issue [with] lack of storage space. 'The rear cargo space is exactly the same. We haven't had to raise the floor. The only compromise we have to make is we're not able to offer a seven-seat derivative.' Owen has spent the last decade overseeing JLR's transition to electric power, having risen to chief engineer of vehicle engineering for the Range Rover, Range Rover Sport and Defender models. 'I pretty much only ever worked on Range Rover,' he said. 'I've done a few other projects. I didn't work on the [Jaguar] I-Pace. I was working on the previous-generation Range Rover.' To that end, the I-Pace - launched under the Jaguar brand as the first premium all-electric SUV from any manufacturer when it was revealed in 2016 - became infamous for reliability issues, particularly with its electric drivetrain and battery pack. Its poor customer satisfaction prompted Jaguar Land Rover to learn from its failures, focusing on reliability, improved thermal management and customer-centric design in the development of the Range Rover Electric. Owen said: 'We're making sure we learn from, you know, our mistakes with respect to I-Pace. 'So we're testing all aspects of the car… we've just had a northern hemisphere winter that we've completed, so we've been doing our low-mu testing on the frozen lakes.' He added: 'Some people have got [chargers] bolted on. Their garage might have two or three cars… [so you don't have to use a] 15 metre cable. 'Cabin comfort. Battery temperature. Whether it's to cool it down, whether it's to warm it up. Recovering heat from the air at minus 15… It also reduces the heating energy consumption by over 40 per cent [compared to I-Pace].' This includes the decision to forgo a front trunk, with the rear cargo volume remaining unchanged from the combustion-engine version and the 117-kWh battery pack accommodated without raising the floor. This approach contrasts with the I-Pace, which offered a small front storage compartment. Indeed, due to packaging constraints, the electric Range Rover will only be available with two rows of seats - which rules out a seven-seat option. While a spare wheel will be offered, it will reduce luggage capacity as it will sit above the cargo floor. Much like the upcoming Range Rover, Mercedes' electric G-Class also lacks a front trunk - although they compensated with a uniquely styled tailgate-mounted cargo box. The electric Range Rover will not compete with the G580, Owen claims, as it offers unmatched off-road capabilities, combined with Range Rover's famed luxury. The electric Range Rover's world premiere is expected later this year, with deliveries expected to begin in 2026.
BBC News
14 minutes ago
- BBC News
Devon family accommodation sees 'surge' in last-minute bookings
There has been a surge in last-minute bookings for family accommodation in South Devon, helped by the good weather, a tourism boss has executive of the English Rivera Business Improvement District (BID) Carolyn Custerson said family operators, such as holiday parks, big hotels with indoor swimming and family activities, were about 75% full by the start of the six-week summer holidays."The weather stimulates bookings," she said. "It gives people confidence to holiday in the UK and we have seen a surge of last minute bookings."Rhian Hughes, sales and revenue manager at Lady's Mile Holiday Park in Dawlish, said its venue was already 80% full. "Fingers crossed we can get to full capacity," she added."I think over the bank holiday weekend of August, we are 100% full."She agreed that the good weather has played a big part in people booking. South Devon attracts on average more than four million visitors a year and Ms Custerson said bookings will continue "right through the summer". "For the next six weeks - having talked to major operators that provide family accommodation over the last 48 hours - I think we are running at about 75% full," she said."Some people are booking up to 24 or 48 hours before in advance."But she said "there is still capacity"."I think we will be 80% to 85% full by the end of summer, which is very good." She added that the recent spells of hot weather has helped to give tourists confidence in holidaying in the UK, compared to its biggest competitor which is going abroad. "We do have a very strong rebooking pattern which is testament to what we have to offer," added Ms Custerson."We are a year-round destination, but the summer is when the bulk of the visitors come."
Reuters
14 minutes ago
- Reuters
Union Pacific nearing agreement to buy Norfolk Southern Bloomberg reports
July 26 (Reuters) - Union Pacific (UNP.N), opens new tab, the largest U.S. railroad operator, could reach an agreement to acquire rival Norfolk Southern (NSC.N), opens new tab as soon as early next week, Bloomberg News reported on Friday, citing people familiar with the matter. Union Pacific had said on Thursday it is in advanced talks to acquire its rival, signaling that a deal to form a $200 billion coast-to-coast rail company could be close - and potentially trigger further consolidation among remaining freight rail giants. Union Pacific declined to comment, while Norfolk Southern did not immediately respond to a Reuters request for comment. The combination, which would be the largest-ever buyout in the sector, would create the first modern West-to-East single-line freight railroad in the United States, significantly affecting how goods from grains to chemicals to autos move across the country. The fact that talks are advancing has surprised many in the rail industry and Wall Street as the U.S. freight rail system already functions as two regional duopolies by point of origin. The talks show how thinking around antitrust issues has shifted under President Donald Trump's administration, with his executive orders aimed at removing anti-competitive barriers and opening the door to potential megamergers in the industry. If completed, the deal would combine Union Pacific's dominant position in the western two-thirds of the U.S. with Norfolk Southern's 19,500-mile network spanning 22 eastern states. Union Pacific is valued at approximately $138 billion, according to LSEG data. The company has been grappling with sluggish automotive volumes and volatile coal shipments as power producers shift to natural gas, which is shipped by pipeline. Norfolk Southern, which is worth about $63 billion, is emerging from a turbulent period that included the ouster of its former CEO amid ethics investigations, a high-profile boardroom clash with activist investor Ancora, and a costly train derailment that set the company back about $1.4 billion.
