What: Seven in ten UK retailers report profit losses from tariffs, with 81% planning price increases and 42% considering market withdrawals amid new global trade barriers.

Why it is important: This comprehensive response to tariff pressures, affecting both operational strategies and pricing decisions, reflects the retail industry's largest coordinated adaptation to trade policies in recent history, with implications for global supply chains and consumer behaviour.

The retail industry faces unprecedented challenges as new tariffs impact profitability and operations across the sector. A recent survey reveals that 71% of UK retailers have already experienced profit losses due to tariff impacts, with 90% expressing concern about their business prospects over the next twelve months. In response, an overwhelming majority (81%) plan to implement price increases to offset rising costs. The situation has prompted retailers to consider more dramatic measures, with 42% planning to cut costs elsewhere and an equal proportion contemplating scaling back or completely withdrawing from high-tariff markets. Customer relationships are at risk, as 87% of retailers worry about consumer sensitivity to tariff-related price changes, while 93% fear negative reactions to increased prices. The announcement of new tariffs affecting 92 countries, with rates ranging from 10-41%, has intensified these concerns. Major brands are already feeling the impact, with Adidas warning of tariff-fuelled cost rises up to €200m for the remainder of the year.

IADS Notes: The new survey's findings align with broader market trends observed throughout 2025. In March 2025, BCG projected staggering additional import costs of $640 billion, explaining why 71% of retailers are already experiencing profit losses. The widespread plan to increase prices (81%) mirrors actions already taken by major retailers, as evidenced in July 2025 when Macy's implemented a 4.2% increase in footwear prices. Consumer anxiety about these changes is well-founded, with May 2025 data showing the sharpest decline in consumer confidence since August 2021. Retailers' strategic responses have been multifaceted, from Costco and Walmart pressuring Chinese suppliers for concessions in March 2025 to fast-fashion giants like Shein and Temu reducing marketing spend by up to 31% in April 2025. The impact extends beyond pricing, with the elimination of the $800 de minimis rule in February 2025 affecting millions of daily shipments and forcing fundamental changes in retail operations. Adidas's warning of €200m in cost rises exemplifies the broader challenge faced by global brands, as new tariffs affecting 92 countries reshape the retail landscape.

Seven in ten UK retailers have already lost profits as a result of tariffs, according to new survey