Seven FTSE Retailers Reveal Profit Warnings in Q1 2024

Retailers in the UK Grab the Red Flag in Q1 2024

The latest numbers from EY‑Parthenon’s Profit Warnings report are already turning heads. In the first three months of 2024, seven UK‑listed companies in the FTSE Retailers sector raised the dreaded profit warning flag – a lively two more than the same period back in January‑March 2023.

Disposable Income: Still a Bit of a Crunch

It turns out that the cost‑of‑living squeeze is still squeezing most consumers’ wallets. Now, 41 % of the FTSE Retailers have issued a profit warning over the last year. That’s a lot of cash‑cushion alerts!

When the Whole Consumer Pack Gets Bummed Out

The pressure isn’t confined to just the retailers. The wider FTSE Consumer Discretionary group – think tech gadgets, cars, and everything that people buy for fun – has the most warnings overall with 24 in Q1 2024 alone. That accounts for 34 % of all warnings during the period.

Personal Goods Hit the Highest Spike

Picture this: over half of the companies in the FTSE Personal Goods sector warned in the first quarter. In fact, five warnings were issued in Q1 2024, which is the highest number since the pandemic era. Two‑thirds of the entire sector have announced a warning over the last year – a jump from a mere one‑third at the end of 2023. It looks like the luxury goods lane is feeling the burn, and semi‑durables like clothes, shoes, and jewellery aren’t escaping either.

What the Experts Think

Silvia Rindone, EY UK’s Retail Lead, sums it up with a measured optimism:

“While disposable‑income strain is easing (slowly) and 2024 looks a tad brighter for retailers, the EY ITEM Club is forecasting a modest 0.7 % rise in consumer spending this year. Retailers will be hoping that confidence picks up come summer, offsetting the new cost pressures from business rates and the national living wage. Adaptability has become a core skill that retailers need, and as the economy begins to bump back, that skill will keep playing a vital role in propelling growth. While the outlook may be more positive, consumers are still wrestling with their own pressure from the cost‑of‑living crisis. Retailers should keep an eye on how buying behaviour shifts – over recent years shoppers have become a lot savvier at hunting for value when making a purchase.”

Bottom Line: Eat Your Cautionary Carrot

Retailers, take a breath – the market’s easing but don’t hit snooze on your guard. Keep your ears to the ground and stay nimble. After all, in a world where shoppers are campaigning for every shade of ‘smart spend,’ you must keep your offer exciting, your stores agile, and your giggles handy.

Nearly one-in-five UK-listed companies have issued a profit warning in the last 12 months

2024 UK Profit Warnings: A Tiny Dip, Big Shake‑Ups

Across the board, UK listed companies dropped their profit warnings by 7% last quarter – 70 warnings in Q1 2024 versus 77 the previous quarter. That’s the modest decline we’d all hoped for. But here’s the twist: 61% of those companies were issuing their first warning in twelve months, a record high since Q1 2022. So while the raw numbers are sliding, the warning news is still on the rise.

Hard‑Hit Companies: Three or More Warnings?

39 firms have logged at least three warnings in the last year.
Over a fifth of those are facing delistings due to insolvency or takeover.

Why the Warnings Are Coming

Contract cancellations and delays: 29% of the reports.
Higher costs: 17%.
Weaker consumer confidence: another 17%.

Sector Spotlight: Industrial Support Services & Financial Services

The FTSE Industrial Support Services sector—think B2B suppliers, recruitment firms and industrial players—issued nine warnings in Q1 alone and 18 over the past six months. That tops the entire 2022 figure! Low business spend, recruitment hiccups, rising costs, and contract changes are the big culprits.

In contrast, the financial services gig reported 11 warnings in Q1, the highest count since the pandemic era and, before that, the 2008 crisis. The uptick points to vulnerabilities in auto finance lending and parts of wealth/asset management.

Expert Take: Meg Wilson on Retail Resilience

“Sector stress and insolvency is climbing, especially in mid‑market retail,” says Meg Wilson, EY Partner, Turnaround and Restructuring Strategy.
“Yet a growing band of retailers are not just surviving—they’re thriving. In low‑demand times, the race for a slice of the market fuels fierce competition, giving an edge to those who pivot fast.”

“Data shows swift action keeps value alive. Green shoots of recovery are visible, but retailers can’t rely on a hit‑the-plant economy to tomorrow.”
“We’re in a phase of unprecedented uncertainty—global elections, geopolitical jitters—that demands scenario planning.”
“An apparently smoother year on paper still requires careful manoeuvring.”