UK retailers feel Brexit pinch in 'challenging' conditions
The difficulties facing Britain's non-food retailers were laid bare Tuesday in gloomy reports from department-store group Debenhams PLC and floor-coverings seller Carpetright PLC.
Debenhams, the operator of 250 stores across 27 countries, said full-year earnings could be at the low end of analysts' estimates should current market volatility persist. Carpetright, which runs 426 outlets in the UK alone, reported a 21pc drop in full-year earnings.
Clouds are gathering over the UK's shopping districts as shoppers squeezed by price increases and stagnant wages defer purchases. An index of consumer confidence published Tuesday showed that Britons are feeling just as gloomy as they were after last year's Brexit vote. Companies from Next to DFS Furniture to Majestic Wine have warned that conditions are becoming tougher amid the political upheaval that followed the referendum.
"UK non-food retailers have been experiencing volatile trading since Easter and the non-food market has been badly affected," Sergio Bucher, chief executive officer of Debenhams, said on a conference call. "Our customers are telling us they are uncertain because of inflation, rising food prices and fuel prices. They are being more cautious with the money they have to spend."
Sales at Debenhams declined in the third quarter, hurt particularly by a weak market for clothing.
Carpetright's underlying pretax profit fell to £14.4m in the year ended April 29, meeting analyst estimates that were reduced after a downbeat April trading update.
A "challenging consumer environment and competitive landscape remain headwinds," CEO Wilf Walsh said in a statement. (Bloomberg)