Debenhams reports flat sales
Fears over the possible impact of new British government spending cuts was dampening consumer confidence even though shoppers had more money to spend, the boss of department store chain Debenhams said.
Britain's newly re-elected Conservative government is pressing ahead with plans to cut welfare spending by £12bn (€16.8bn).
Debenhams ceo Michael Sharp said customers recognised the improved economic background, with increases in real wages driven by falls in the cost of energy and food, but still remained cautious.
"On the one hand they can see the positive economic indicators but on the other hand they also pick up the messages that say 'things are going to remain tough for a while' and that influences their feeling about their own personal financial situation," he said. "That manifests itself as proceed with caution."
The retailer, which has 161 UK stores and more than 240 outlets worldwide, including Ireland, also said moves to bring forward promotions left sales flat in its third quarter. Same-store sales were down by around 1pc over the 15 weeks to June 13.
This compared to analysts' forecasts of between down 2pc to up 0.5pc.
Debenhams maintained gross margin guidance for its 2014-15 year and said it was on track to achieve pre-tax profit expectations of £111m compared to £110m in the previous year.