Marks & Spencer was hit hardest; its shares fell to an eight-year low in the wake of more cuts in analysts' earnings forecasts and worries about Christmas trading . The shares closed down 12.75p at 238p, a level not seen since 1991.
One analyst said: "People said pounds 3 could be a support level, then pounds 2.50. Now they say pounds 2." Another said more cuts are possible owing to weak demand this month and the risk of aggressive discounting. Earlier this month M&S reported a 43 per cent fall in first-half profits.
Arcadia, owner of Top Shop, Dorothy Perkins and Miss Selfridge, fell further after its half-year warning on Thursday; the shares dropped 17p to 90.5p. Storehouse, which on Thursday reported a pounds 17m first-half loss, fell 7.5p to 56.5p. Supermarkets added to the decline; Tesco fell 14.25p to 170.5p and J Sainsbury was down 22.25p at 318.25p, but Safeway closed up 1p at 188.25p.
Safeway and Sainsbury are to post interim results next week. Analysts gave downbeat forecasts for their profit growth as food retailers are squeezed by the arrival of Asda buyer Wal-Mart in the UK.
Safeway has already said first-half profits will fall to pounds 150m. But there are fears for the dividend, with analysts predicting a cut of as much as one-third to about 3p a share. Analysts estimate that Sainsbury's profits before tax and exceptionals will be about pounds 340m, against pounds 461m last year. The dividend is expected to be held at 4.02p a share.
There were also falls for Selfridges, down 12p to 251.5p, and Great Universal Stores, down 9.5p at 400.5p. Even some of the best-rated companies did not escape; Next was down 14p at 530p and Kingfisher slid 12.5p to 644p.The only good news came from unlisted John Lewis Partnership, where department store sales rose 10.5 per cent in the week to 13 November on the week last year.