Shops drop hits shares

£1.7bn dive as customers spend less

FEARS that shoppers are reining in their spending wiped nearly £1.7billion off the value of Britain’s biggest retailers yesterday.

Shares in a host of high street and online firms tumbled after the Office for National Statistics said retail sales by volume fell 1.2% between April and May.

The bigger than expected drop came as shop prices jumped 2.8% year-on-year, the highest rise recorded since 2012.

Sofa chain DFS added to fears by warning the general election shambles would hit its profit. The company said trading had “recently weakened beyond our expectation”, with shopper numbers down “significantly”. Shares in DFS dived 20% as a result.

Meanwhile the FTSE 350 General Retailers index of the UK’s biggest listed firms in the sector tumbled nearly 100 points. Next’s shares fell 6%, Marks & Spencer suffered a 4.7% drop, Debenhams was down 4.3% and B&Q owner Kingfisher shed 2.8%.

The volume of goods bought last month was 0.9% higher year-onyear, but the figure represented the slowest growth since 2013, the ONS said.

Shops selling household goods suffered a 6.4% fall. Consumer confidence had held up well since last year’s Brexit vote until now, but it has been shaken by rising inflation fuelled by the weak pound which has pushed up import costs. Slowing wage growth is another factor.

Ian Gilmartin, head of the retail and wholesale division at Barclays, warned: “Retailers will have to navigate some choppy waters in the coming months.”