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 per cent between April and May.
The bigger than expected drop came as shop prices jumped 2.8 per cent yearon-year, the highest rise recorded since 2012.
Sofa chain DFS added to fears by warning the general election shambles would hit their profits. The company said trading had “recently weakened beyond our expectation”, with shopper numbers down “significantly”. Shares in DFS dived 20 per cent as a result.
The FTSE 350 General Retailers index of the UK’s biggest listed firms in the down 55 at sector tumbled nearly 100 points. Next’s shares fell six per cent, Marks & Spencer saw a 4.7 per cent drop, Debenhams were down 4.3 per cent and B&Q owner King fisher shed 2.8 per cent.
The volume of goods bought last month was 0.9 per cent higher year-on-year, but the figure represented the slowest growth since 2013, the ONS said.
Shops selling household goods suffered a 6.4 per cent fall. Consumer confidence had held up well since last year’s Brexit vote. But it has now been shaken by rising inflation as the weak post-Brexit pound pushes the cost of imports up. Real-terms falls in wages are also taking a toll.
Ian Gilmartin, head of the retail and wholesale division at Barclays, warned: “Retailers will have to navigate some choppy waters in the coming months.” 7419.4 GlaxoSmithKline Halfords Hays HSBC Imperial Brands International Airlines Grp ITV Kingfisher Land Securities Legal & General Lloyds Marks & Spencer Morrison National Grid Next Old Mutual Pearson Prudential Reckitt Benckiser RELX Rentokil Initial 1684.0 350.2 163.0 686.7 3555.5 -0.5 -16.6 -2.4 +6.0 -27.5 584.0 -20.5 179.1 -5.7 301.5 -8.8 1060.0 -23.0 257.5 -0.8 68.0 +0.1 351.8 -17.5 239.9 -4.8 1011.0 -4.5 4037.0 -263.9 201.2 -3.5 713.5 -8.5 1773.5 +5.5 7860.0 -5.0 1690.0 -2.0 277.0 -2.1 Oil = $46.92 Rio Tinto Rolls-Royce Royal Mail RSA RBS J Sainsbury SSE Severn Trent Serco Sports Direct Shell Sky Smith & Nephew Smith WH Stagecoach Standard Chartered Standard Life TalkTalk Taylor Wimpey Tesco Thomas Cook Unilever 3073.0 895.0 435.4 618.0 251.5 262.4 1471.0 2402.0 115.6 291.3 2127.0 963.0 1343.0 1737.0 205.6 751.4 384.6 177.0 178.7 180.0 89.9 4250.0 -69.5 -1.0 -5.7 -6.5 +1.6 -5.2 -18.0 -32.1 -3.8 -8.6 -15.0 -3.5 -2.0 -54.0 -5.2 -4.7 -6.8 +1.6 -2.3 -5.9 -4.0 +8.0 United Utilities Vodafone Wolseley Trinity Mirror 961.0 221.2 4759.0 97.5 -17.0 -1.7 -71.0 -1.7