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Whitbread and Carpetright fall on UK consumer fears

Restaurant and pub group and carpet retailer warn over trading conditions, adding to fears over UK consumer confidence.

 
Whitbread and Carpetright fall on UK consumer fears

Shares in Whitbread and Carpetright have slumped as the restaurant and pub group and carpet retailer warned on trading conditions, adding to fears over deteriorating UK consumer confidence.

Whitbread (WTB) fell to the bottom of the FTSE 100, down 7.4% at £39.85 and bucking a rising market, with the UK blue-chip index up 16 points, or 0.2%, at 7,281.

The Costa Coffee and Premier Inn owner posted an 8.2% rise in full-year revenues, broadly in line with expectations, but investors took fright at falling sales at Costa and chief executive Alison Brittain's warning of a 'tougher consumer environment than last year'.

'Investors focused on the cost headwinds that lie ahead,' said Russ Mould, investment director at AJ Bell.

'The national living wage, business rates, commodity price inflation and foreign exchange rates are set to outweigh the benefits from the group's cost efficiency programme and continue to squeeze margins at both its Costa Coffee and Premier Inn arms.'

Among 'small cap' stocks, Carpetright (CPRC) was the biggest faller, down 4.1% at 236.8p as the carpet retailer forecast full-year profit at the lower end of expectations.

'In common with other retailers in the home improvement sector in the UK we have experienced tougher trading conditions over the last three months,' said chief executive Wilf Walsh.

'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 our current range.'

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