South West retailers issued the biggest number of profit warnings in 2018 for seven years, according to research.
A total of 18 per cent of profit warnings by listed companies in the region were in the retail sector, the EY Profit Warnings Report found.
The retail industry in the South West issued four profit warnings in 2018 – comparable with the four warnings reported in 2011.
South West companies across all sectors issued a total of 22 profit warnings last year, with 10 of these warnings issued between October and December 2018.
Profit warnings in the region have risen consecutively over the past three years, from 18 in 2016, to 21 in 2017 to 22 in 2018.
The travel and leisure industry in the South West also issued four profit warnings in 2018.
Nationally, 38 per cent of the retail sector across the UK issued a profit warning – the highest level since 2008 – mirroring the upward trend in the South West.
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Last year also saw the second highest level of profit warnings issued by UK plc since 2008, with 287 profit warnings – a rise of 4 per cent year-on-year.
Allan Noble, director in EY’s transaction advisory team in Bristol, said: “Following events last week, there is further political and economic uncertainty to contend with and no let-up in the pace of change.
"But rising uncertainty wasn’t the only reason why profit warnings spread in 2018.
“In the retail sector, a combination of a relentless margin squeeze, the continuous need for reinvention and falling consumer confidence made 2018 an exceptionally tough year for the retail sector in the South West and across the whole of the UK.
“What happens next depends on how much more unpredictable 2019 becomes.
Markets adjust quickly to new realities, however, in this fast-moving world companies need to keep moving forward or risk finding themselves on the wrong side of sector trends, potentially triggering a new cycle of profit warnings in years to come."