FTSE Retailers issued five profit warnings in Q2 2026, up from three in the first quarter of the year, according to EY-Parthenon’s latest Profit Warnings report. This makes 2026 only the third year since 2007 in which the sector has recorded more warnings in the second quarter compared to the first.
FTSE Retailers issued a total of eight profit warnings in the first half of 2026, two more than the six recorded during the same period last year. This increase underscores the persistent structural and cyclical pressures facing the sector, despite periods of stronger trading performance.
Silvia Rindone, EY-Parthenon UK&I Retail Lead, said: “Retailers entered 2026 with cautious optimism following a stronger festive trading period, but the rise in profit warnings in Q2 shows how quickly conditions can shift. The sector remains highly exposed to external shocks, and the impact of geopolitical disruption has compounded existing pressures on costs, supply chains and consumer confidence. While headline sales have shown some resilience, this has often been driven by promotions rather than underlying demand strength. Many retailers are navigating a difficult balancing act between protecting margins, remaining price competitive and continuing to invest in technology and customer experience.
“The growing divergence in performance across the sector is becoming more pronounced. Businesses able to fund investment in AI, other technology and customer experience are strengthening their competitive position, while others are struggling to keep pace. This is widening the gap between higher-performing retailers and those facing ongoing financial pressure.
“Looking ahead, the outlook for the second half of the year is finely balanced. Supportive factors such as seasonal demand and policy developments may provide some uplift, but ongoing cost pressures, cautious consumers and geopolitical uncertainty mean execution will be critical in determining which retailers outperform and which continue to face challenges.”
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