DIY shares fall on retail gloom

Published:  05 August, 2010

LONDON: Shares in retailers including DIY outlets lost ground yesterday on warnings of a retail slowdown by Carpetright, Britain's biggest floor coverings chain and Next, the second-largest fashion chain.

B&Q owner Kingfisher fell 7.5p to 216.3p and Argos owner Home Retail Group dropped 9.3p to 235.2p on yesterday's trading.

Carpetright reported a drop in underlying sales and said it was planning for spending to stay subdued for the rest of 2010 while Next said it expected a "noticeable cooling of demand" among shoppers to deepen.

Carpetright said sales at British and Irish stores open at least a year fell 3.4% in the 13 weeks to 31 July, compared with a 1.5% rise the previous quarter.

Philip Harris, chairman and chief executive, who regards Carpetright as a business that tends to be "first in, first out" of a recession. We remain cautious about the outlook for consumer spending for the balance of the year", he said.

Greg Lawless, analyst with broker Collins Stewart said: "The outlook for the high street retailers is not good given the forthcoming VAT rise, and cost price inflation…which will put further pressure on already subdued consumer demand."

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