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Investors shun High Street on spending fears

The prospect of higher prices and belt-tightening are threatening to blow the high street recovery off course, leading retailers have warned.

Fashion chain Next and flooring specialist Carpetright believe the outlook for consumer spending remains poor.

Next was the sharpest faller on the FTSE 100 after highlighting public spending cuts and looming tax rises as key threats to confidence in the sector.

It saw underlying sales slip 1.5% in the first half of the year and expects that performance to deteriorate further despite strong homewares demand.

Carpetright added to the gloom by reporting a drop-off in trade and a subdued forecast for the immediate future. The chain's shares dropped by more than 3% on its news of a 3.4% fall in first quarter sales.

Shares in fellow retailers Marks & Spencer, B&Q owner Kingfisher and Home Retail - the group behind Argos and Homebase - also suffered on the FTSE following the disclosures.

Source : James Sillars - Sky News online

04 August 2010
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