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Topps Tiles eyes Easter as recovery recedes

Topps Tiles today joined Carpetright in warning that a pre-Christmas sales recovery had receded during the first three months of this year.

Shares in Britain's biggest retailer of tiles and wood flooring fell by 9 per cent, or 5.75p, to 55.5p.

Between October and December, like-for-like sales, which strip out trade from stores opened during the period, grew by 5.5 per cent. But, for the entire six-month period up to Easter Saturday, Topps Tiles expects like-for-like sales to grow by just 2.4 per cent.

John Stevenson, an analyst at KBC Peel Hunt, estimates that high single digit sales growth in December turned to a double-digit fall in the snowy January, after which sales had been flat, "as consumers appear to be stepping back from bigger ticket home-related projects ahead of the election."

The company expects overall first half revenues to increase just 0.4 per cent to £91.5 million. Matt Williams, Topps Tiles’ chief executive, said that "levels of consumer confidence remain unstable and trading patterns during the second quarter have been subdued."

Last week, Carpetright also said a pre-Christmas trading recovery had run out of steam

Both statements have emerged before the crucial Easter weekend, a key trading period for retailers hoping that customers will make “big ticket” purchases and buy goods for home improvements.

However, the monthly GfK/NOP consumer survey today showed consumers' confidence in their personal financial situation, the general economy and in their willingness for making major purchases all dropped in March.

Matthew McEachran, retail analyst at Singer Capital Markets, said: "This appears to tie in with recent trading anecdotes from the retailers, which have broadly all showed trading since the snow went away to have been weaker than prior to Christmas."

Although the official estimate for Britain's economic growth in the last three months of last year was revised up from 0.3 per cent to 0.4 per cent, there are mounting worries over whether this growth was sustained in the January to March quarter.

Source : Robert Lindsay - The Times

31 March 2010
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