UK-listed companies issued 65 profit warnings in the three months to September, according to EY-Parthenon. That is up from 59 in the previous quarter and the highest number since the end of 2024, when there were 71.
Why companies are warning
More than half of the warnings (54%) blamed policy changes and uncertainty around the world. 38% mentioned the conflict in the Middle East, and 35% pointed to rising costs. Over the past year, 17% of listed companies have issued at least one warning.
Jo Robinson, a partner at EY-Parthenon, said supply chain, energy and policy disruption has become more persistent, and that “the pace of policy change is making forecasting, investment and capital allocation much harder”. She added that businesses have still shown resilience.
Slow sales for clothes
Figures from the British Retail Consortium show UK retail sales grew 1.3% in September, compared with 2.3% a year earlier. Sales of non-food items, which include clothing, grew just 0.3%, and in shops only 0.1%. That leaves fashion and other non-essential retailers under pressure going into Christmas. Shoppers are gloomy too: their expectations for the economy fell to -34 in September from -28 in August.
Eyes on the Budget
Chancellor John Healey delivers his first Budget on 28 October. Research by the BRC and UKHospitality found retailers pay 72p in business taxes for every £1 of pre-tax profit, against an average of 50p across 11 major sectors. The BRC estimates that changes to National Insurance and rises in the National Living Wage have added £6.5 billion to retailers’ staff costs over two years. Bosses from Tesco, Marks & Spencer and Sainsbury’s met the Chancellor last week to ask for a higher National Insurance threshold and changes to business rates.
BRC chief executive Helen Dickinson warned that extra costs would hit investment, jobs and prices, and that another rise in business rates would put high street jobs at risk.
The tailoring view
Rising costs are felt by every business on the high street, large and small. For customers, the practical advice is simple: if you need something made for a wedding, a party or the new year, book early, before the Christmas rush.
Source: Retail Gazette.
Photo: Colin Smith, licensed under CC BY-SA 2.0.
