In the last 12 months, two-thirds of the sector has issued a profit warning, compared with a third at the end of 2023, making it the sector with the highest percentage of companies warning and the fastest increase in the last three months. This increase reflects the spread of earnings pressures into the luxury goods sector and ongoing pressure on semi-durable goods, such as clothing, footwear and jewellery.
Silvia Rindone, EY UK&I Retail Lead, said: "While the strain on disposable incomes is easing slowly, the outlook for 2024 is looking more positive for retailers, with the EY ITEM Club forecasting consumer spending to rise by 0.7% this year. Retailers will be hoping that consumer confidence is buoyed as we enter the summer months, offsetting new cost pressures arising from increases in business rates and national living wage."
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