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Flooring firm Carpetright unable to sweep losses under the carpet

Carpetright has reported a further slide in UK sales as fragile consumer confidence has lowered demand for their big ticket, housing-related items.

The flooring firm said like-for-like sales were down 7.3% in the UK and Ireland in the 12 weeks to October 23, compared with the 3.4% fall seen at the end of July.

Chairman and chief executive Lord Harris of Peckham said he expected the current market conditions to continue into next year.

He added: "The further reduction in mortgage approvals along with fragile consumer confidence has produced a difficult market."

Shares fell 7% as City analysts revised their profit forecasts in the wake of today's gloomy update from the company.

Matthew McEachran, an analyst at Singer Capital Markets, said he expected the City's forecast for 2011 profits to fall 13% to around £28m.

He added: "Typically October is a key month for the group as consumers look to replace carpets ahead of the Christmas period but this year low consumer confidence and low levels of mortgage approvals have impacted trade."

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Carpetright, which has 702 stores across the UK, Ireland, the Netherlands and Belgium, said it still expected an improvement in its full-year margin due to cost controls and continued management of pricing and promotions.

Sales staged a marked recovery last year - reaching double digit growth - before a reversal in the fourth quarter of the last financial year and a 5.8% drop in UK like-for-like sales in the 25 weeks to October 23.

Across the group, sales were down 3.7% after a 1.7% drop in like-for-like sales in Belgium and the Netherlands when measured in local currency.

Lord Harris added: "The group remains well placed to capitalise on opportunities when economic conditions improve."