Shoppers prefer holidays to carpets as austerity bites

Shares in Carpetright tumble as post-christmas sales show steep decline and house prices stall

CARPETS are falling out of favour among homeowners, as sleek laminate flooring, characterful wooden floors and practical tiles rise in popularity. Yesterday, Carpetright, one of Britain’s biggest carpet fitting shops, saw shares fall by nearly half after the retailer issued a shock profit warning.

It was the worst in a series of profit warnings over years for the firm and dragged its stock down by as much as 45pc to 90p per share.

Experts said Carpetright may be feeling the strain as homeowners replace carpets less frequently to save money, preferring instead to spend their cash on holidays and days out.

Clive Black, director at Shore Capital, said: “The replacement cycle for carpets and other flooring is going up because people don’t want to spend as much any more. Their incomes are squeezed and they are thinking, ‘If it ain’t broke, don’t fix it’.

“Replacement windows for carpets are going up by years. Whereas it was once around seven to eight years, it is now more like eight or 10 years.

“People would rather spend their income going on holidays and having experiences.”

A recent slowdown in house price growth, particularly in the Southeast, is also thought to be behind consumers’ reluctance to spend several hundred pounds on new flooring.

David Madden, a market analyst at CMC Markets, said: “If property prices are ratcheting up, people are more likely to invest in the appearance of their home.

“It is when prices stagnate that people think twice before buying a new carpet. They are also seeing a slight squeeze in their wages and inflation in other areas of spending.

“Three or four years ago, the attitude would have been that people can afford a new carpet because it would add an extra £4,000 or so to the value of their house. It’s less like that today.”

Wilf Walsh, chief executive at Carpetright, said: “Despite a positive start to our third quarter, we have seen a significant deterioration in UK trading during the important post-christmas trading period.

“While average transaction values were up year-on-year, the number of customer transactions since Christmas was down, which we believe is indicative of reduced consumer confidence.” Like-for-like sales in its core flooring business, which had previously been performing well, sank 7.1pc in the post Christmas period.

The profit warning came as a dire Christmas on the high street was laid bare yesterday, with official figures showing the worst December sales performance since 2010.

Retail sales fell by 1.5 per cent month on month, according to the Office for National Statistics, a much heavier