More than a third of UK-listed retailers issued a profit warning in 2025, according to a report by EY Parthenon.
The figure of 34% marks the fourth consecutive year that retail warnings have remained at or above this level. FTSE retailers issued 15 warnings in 2025, a decrease from 20 in 2024, though pressure intensified in the second half of the year.
The personal care, drug and grocery sector saw warnings rise to eight in 2025 from five the previous year. Across all sectors, UK firms issued 240 warnings in 2025, the lowest annual total since 2021.
Policy changes and geopolitical uncertainty were the primary drivers, cited in 42% of all warnings. This is a significant increase from 12% in 2024 and the highest proportion for this cause in 25 years.
Other factors included contract delays, cited in 33% of warnings, while weak consumer confidence and rising costs each accounted for 11%. Nearly 17% of all listed businesses issued a warning in the last 12 months.
EY-Parthenon UK&I retail lead Silvia Rindone said: “Changing consumer behaviour is continuing to make the trading environment challenging, with shoppers trading down, delaying purchases until promotions, and becoming increasingly selective. Despite an uplift in retail sales in 2025, this masks the persistent pressures that many businesses are facing.
“Rising employment costs – from the National Living Wage to National Insurance – have proved difficult to absorb or pass through in a market defined by fierce competition, price wars, and volatile demand patterns.”
EY-Parthenon partner and UK&I financial restructuring leader Jo Robinson added: “Our latest data shows that the pace of UK profit warnings has slowed, but this feels more like an uneasy pause than a turning point. Many firms continue to face a challenging and uncertain backdrop, with a record level of warnings referencing the knock-on effects of policy and geopolitical upheaval, including tariff-related impacts, Autumn Budget uncertainty, and employer National Insurance contributions changes coming into effect.
“In the last year, we’ve seen businesses shift their focus from planning for a return to previous norms, to recalibrating for a global landscape of lower growth, higher costs and rapid technological disruption.”
