Irish firms are in a ‘stronger position’, as profit warnings rise in the UK

“We believe Irish businesses are facing these challenges from a position of relative strength with an economy that is expected to fare better over the next 12 months compared to the UK,” said Andrew Dolliver, partner at EY-Parthenon in Ireland.

Mr Dolliver attributed Ireland’s economic buoyancy to its “multinational export sector and the fact that it is less reliant on consumer spending”.

These comments were made after EY-Parthenon released its latest report, which showed that profit warnings for UK-listed companies in Q3 climbed 69% year-on-year.

In total, 86 profit warnings were issued between July and September 2022, compared to 51 in the same period of 2021. The highest number of Q3 warnings was in 2001, when 133 warnings were issued.

However, it stated that Ireland is not immune to shocks created by the current economic storm, with retail particularly vulnerable.

“Whilst seasonal factors such as Halloween, Black Friday, and the Christmas trading period present opportunities for Irish retailers to reverse the recent trend of falling sales, consumer sentiment remains impacted by cost-of-living concerns,” said Colette Devey, EY Ireland partner and consumer products and retail lead.

EY’s Future Consumer Index showed the market is polarised between cash-strapped consumers and those who are willing to spend if retailers entice them.

“Those retailers who understand their customers’ needs and can deliver tangible value for money, for example, through increasing their own-label offerings or strengthening loyalty and voucher offers, will be more likely to thrive in today’s challenging economic climate,” said Ms Devey.

The Credit Union consumer sentiment survey for October showed one in three are cutting back on food shopping.