Sales down at Carpetright as consumers cut spending
Retailer Carpetright has warned over profits after seeing sales growth slow as consumer caution took its toll.
The flooring chain, which has eight stores in Northern Ireland, reported UK like-for-like sales rising by 1.4% in its final quarter to April 22, down from 1.9% in the previous three months, amid a "more difficult consumer environment".
Chief executive Wilf Walsh cautioned that the tougher trading would leave annual underlying profits towards the lower end of expectations for between £13.9m to £16.2m in the year to April 29.
This is set to mark a sharp fall on the £17.3m posted the previous year.
Mr Walsh said: "In common with other retailers in the home improvement sector in the UK, we have experienced tougher trading conditions over the last three months.
"Whilst we remain confident in our turnaround plan, the level of sales growth in our final quarter leads us to expect that full-year profits will be towards the lower end of the current range."
Carpetright's slowing sales growth marks a wobble in its recovery after returning to positive UK sales in the previous three months. The group suffered a bumpy 2016 after the June 23 vote for Brexit, alongside the collapse of the pound, with first half profits slumping 42% to £4.1m after falling demand from consumers, increasing competition and rising costs of imported goods.
But Mr Walsh plans to plough on with its overhaul, having refurbished 188 stores in its fourth quarter, more than the 150 expected.
Carpetright has closed three stores and relocated two stores into smaller sites, leaving it with 414 in the UK and 13 concessions.
The company's 138-strong chain across Europe reported a 1.4% rise in like-for-like sales over the final quarter, with the boost from the lower pound helping total sales in the region jump 11% higher.
The profit alert comes amid increasing fears of a consumer spending slump as inflation caused by the Brexit-hit pound starts to bite.
Official figures last week showed the biggest fall in retail sales for seven years in the three months to March, as rising living costs ate into household spending.
The Office for National Statistics said sales fell by 1.4% over the three-month period, while also sinking well below expectations to drop by 1.8% on the month to March.
The impact of price rises is expected to see wider UK economic growth pull back to 0.4% in the first quarter of 2017 from 0.7% in the final three months of last year.