
Retail profit warnings more than double as high street pressures mount
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.'
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The Guardian
11 minutes ago
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The Sun
11 minutes ago
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BBC News
41 minutes ago
- BBC News
Why di demand for matcha tea dey dry up global supply
Matcha mania dey sweep di world. Dem fit see di bright green Japanese tea in everytin from Starbucks' lattes for UK to Krispy Kreme doughnuts for Singapore. Social media dey drive di global craze for matcha, as influencers dey share brewing tips, reviews and recipes. Di "Matcha Tok" hashtag don get up to tens of millions of views. Matcha growing popularity also dey linked to Japan post-pandemic tourism boom, as di kontri weak currency dey make am attractive destination as well as boosting demand for Japanese goods. For di middle of di hype, demand for di powder dey rise. US-based tea importer Lauren Purvis tell BBC say her customers dey see once as month supply of matcha running out in days. "Some cafes even dey ask for one kilo per day. Dem dey desperate to keep up," Ms Purvis, wey dey run Mizuba Tea Co tok. But di high demand, combined wit smaller tea crops sake of heatwaves and US tariffs on Japan, also dey push up matcha prices. Traditionally, Matcha - wey pipo dey use sake of im health benefits, caffeine and flavour - na di product of one centuries-old and highly-specialised process. Dem dey make am from green tea leaves called na tencha, wey dem dey keep under shade for weeks as dem still dey grow. Dis step dey very important for developing di tea signature "umami" flavour - one ogbonge taste wey complement dia natural sweetness. Dem go harvest di leaves, dem go use stone mills dry and ground dem into powder, wey fit produce just 40g (1.4oz) of matcha one hour. But in recent months growers dey struggle, as record-breaking heatwaves dey affect crops. For di Kyoto region, wia about one quarter of Japan tencha come from, hot weather don lead to poor harvests even as demand increase. Di kontri also dey face shortage of farmers as dia population dey old and younger pipo wey dey go di industry no plenty. Shops for Uji, one city for Kyoto famous for matcha, dey always see dia shelves go empty as tourists dey enta to buy once dem open dia doors. Sake of day, many retailers don set limits on how much customers fit buy. Kyoto-based Camellia Tea Ceremony dey allow customers buy only one tin of matcha each as visitor numbers doubled ova di last year, director Atsuko Mori tok. Tea master Rie Takeda also tok say she gatz closely monitor her stocks of matcha, as orders wey go bifor arrive in just days now dey take more dan one week. She dey work for Chazen, one tea ceremony chain for Tokyo, wey dey host traditional rituals serving matcha to guests. Shortages mean tea prices for Chazen outlets don rise by around 30% dis year. "[Di demand] dey good," Ms Takeda tok through one translator. "Na gateway for more pipo to sabi about Japanese culture." E also don attract more growers. Matcha production nearly triple between 2010 and 2023, according to Japan agricultural ministry. Dem also tok say green tea exports, including matcha, also rise 25% last year to 36.4bn yen (£180m; $250m). Savour, not hoard Di craze for matcha craze don spark one movement to promote more mindful consumption. Advocates don call out pipo wey dem see say dey hoard matcha or dey profit from dia popularity. Odas don ask tea drinkers to dey careful about how much dem dey use, and to savour matcha for dia purest form instead of as ingredient in recipes. E dey "a bit sad" to see how pipo dey use high-grade matcha to cook – as dia delicate flavour often no dey show - or stockpiled for resale, Ms Mori tok "Matcha na di highest grade of tea and e dey so special to us. So a bit of a contradiction dey wen I hear stories about how dem dey resell am or use am for food." Di Global Japanese Tea Association dey encourage pipo to use lower grade matcha from later harvests, wey plenty and good for cooking. High-grade matcha dey often lose dia delicate flavour wen dem use am in drinks like lattes, dem add. "Promoting awareness of these distinctions dey help ensure say Japanese tea dey enjoyed wit respect, while supporting di craft and tradition behind am," di association tok. Dem also say di prices of matcha dey likely to rise further sake of tariffs US dey impose on Japan. On Tuesday, Washington and Tokyo bin announce one trade deal wey go mean a 15% import tax on Japanese products wey dey enta US. Matcha distributors like Ms Purvis dey ready for di impact. Di Oregon-based entrepreneur say orders go up by more dan 70% for early July ahead of one deadline for di two kontris to reach trade agreement. "As dem no dey grow Japanese tea for US, no American industry dey under threat wey tariffs need to protect," she tok. "We hope say dem go realise say dem need to exempt specialty tea." Even as soaring demand and limited supplies push up prices, some light dey on di horizon. At least one matcha cafe chain dey reason say prices go come down in di future - although not for a while. "Pipo dey buy am well-well at di demand and di demand dey grow rapidly, but we think say e go calm down a bit in two to three years."