• Swindon & Wiltshire Economy
• Monday February 16 2026

Profit warnings down – but half were from B2C sectors

Listed companies in the South West issued 11 profit warnings during 2025 – five fewer than in 2024, according to the latest EY-Parthenon Profit Warnings report.

More than half (55 per cent) of the warnings recorded by listed South West businesses last year came from the FTSE Consumer Discretionary sectors.

The FTSE Travel and Leisure sector accounted for four warnings from South West companies in 2025, three more than the previous year.

Three profit warnings were issued by the region’s listed firms in Q4 2025 – one more than in Q3, when two warnings were issued.

Lucy Winterborne, EY-Parthenon partner in the South West, said: “Shifts in consumer behaviour continue to reshape the region’s consumer sectors, creating a more challenging trading environment for many businesses.

“Consumers are becoming far more selective — delaying discretionary purchases, switching to lower‑cost alternatives, and looking for value at every turn. Despite the uplift in headline sales seen during 2025, underlying pressures remain acute for numerous retailers.

“Rising labour‑related expenses, including the higher National Living Wage and increased National Insurance contributions, are proving difficult to absorb in a market defined by tight margins, aggressive price competition and unpredictable demand patterns.

“We’re also seeing a widening performance gap across South West industries, signalling deeper structural change driven by rapid digital advances and AI‑enabled business models. Organisations that can invest in modernisation — from automation to flexible operating systems — are accelerating ahead, while others are falling behind as more digitally mature competitors seize market share and growth opportunities.

“As cost pressures become more entrenched, businesses should be thinking proactively about how to protect resilience, by improving operational efficiency, automating where possible, reviewing pricing strategies, and strengthening liquidity.

“Staying competitive in a fast‑evolving retail landscape requires ongoing adaptation and an ability to keep pace with shifting consumer expectations and technology‑driven innovation.”

Nationally, UK-based listed firms issued 240 profit warnings in 2025 – including 55 in Q4 – the lowest annual total since 2021, when 203 warnings were recorded.

The leading factor behind profit warnings last year was the impact of policy change and geopolitical uncertainty, cited by more than two in five (42 percent) of all warnings.

This marked a significant increase from 12 per cent during 2024, and the highest annual proportion recorded for this cause in more than 25 years of EY’s analysis.

The other main driver behind profit warnings in 2025 was contract and order cancellations or delays, cited in a third (33 per cent) of warnings, followed by weaker consumer confidence and rising costs, each referenced in 11 per cent of all warnings.

Nearly a fifth (17 per cent) of all UK-based listed businesses have issued at least one profit warning in the last 12 months, a similar percentage to this time last year (18 per cent).

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