Rising Uncertainty and Consumer Sentiment Impacting Retail Industry
- Profit warnings by listed retailers almost doubled year on year during Q3 2025
- 9 listed retailers cautioned over profit in the same period
- Consultancy EY-Parthenon’s report shows highest rate since Q4 2023
- More than half of warnings attributed to declining consumer sentiment
- 64 businesses issued profit warnings during Q3
- Record 47% of warnings due to policy change and geopolitical uncertainty
- Consumer confidence slumped in September, according to BRC
- GfK’s index found consumer confidence highest in August
The number of profit warnings issued by listed retailers almost doubled year on year during the third quarter of 2025, according to EY-Parthenon’s latest ‘Profit Warnings’ report. Nine listed retailers cautioned over profitability, marking the highest rate since Q4 2023. More than half of the warnings attributed declining consumer sentiment as a key factor behind the matter. Across all listed companies, 64 businesses sent out profit warnings during the third quarter. While a record 47% of the warnings attributed ‘policy change and geopolitical uncertainty’ as the most prevalent factors, rising 17% year on year. EY-Parthenon UK & I retail lead Silvia Rindone said: ‘Retailers are entering the golden quarter under immense pressure, with profit warnings at a two-year high and profit warnings citing weaker consumer sentiment at their highest since 2022. The EY-Parthenon data shows that over half of retail warnings stem from declining confidence, compounded by rising wage and tax burdens.’ She continued: ‘To remain competitive, retailers must not only adapt to shifting consumer preferences but also rethink cost structures and operational agility. Innovation is no longer optional; it’s the key to resilience in a market defined by volatility.’ Consumer confidence slumped last month, according to the British Retail Consortium (BRC), amid fears over the state of the UK economy and potential higher taxes. Expectations for the overall economy dropped from -32 in August to -36 in September. However, consumer confidence hit its highest level of the year in August, the GfK’s consumer confidence index found.
Factuality Level: 7
Factuality Justification: The article provides accurate and relevant information about the increase in profit warnings for retailers and attributes it to declining consumer sentiment and policy changes. However, there are some minor issues such as incorrect years (2025 and 2023) and a link to sign up for a newsletter at the end which may be considered irrelevant.
Noise Level: 5
Noise Justification: The article contains some irrelevant information due to incorrect dates (2025 and 2023) and repetitive phrases, but provides relevant insights into the retail sector’s challenges and offers advice for businesses to adapt and innovate. However, it lacks in-depth analysis or new knowledge that the reader can apply.
Financial Relevance: Yes
Financial Markets Impacted: Retail sector
Financial Rating Justification: The article discusses the increase in profit warnings issued by listed retailers, which indicates financial struggles within the industry. This can impact the companies’ stock prices and overall market sentiment for the sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.
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