The fashion-to-furnishings retailer Laura Ashley sparked fresh fears about the fragile state of the retail economy, when it posted tumbling like-for-like sales.
Laura Ashley said like-for-like sales had plummeted by 7.6 per cent for the 17 weeks since January 26. Furniture, homewares and DIY retailers have been hit hard by the credit crunch, as consumers cut back on spending of big items.
The retailer blamed "weak consumer spending" and the impact on existing stores of opening new stores.
Laura Ashley said it had opened 12 new stores and closed two during the first 17 weeks of the financial year. The company – which has built a near 10 per cent stake in menswear retailer Moss Bros this year – said its margins have continued to improve over the period to just below two percentage points.
In a statement, Laura Ashley said: "We will continue to focus on our store expansion and realignment programme, as well as improved product offering."
Further evidence of the downturn came yesterday, when the market research firm TNS Worldpanel said discounters Aldi and Lidl were gaining market share. Aldi was the star performer in the grocery sector for the 12 weeks to 20 May, which TNS Worldpanel said was "fuelled by new shoppers visiting the stores rather than existing shoppers shopping more".
The rival discounter Lidl, which has a 2.3 per cent market share, grew its sales by 9.6 per cent over the period. Separately, John Lewis managing director, Andy Street, said trading conditions were "the toughest since the early 1990s".