Food 'rollercoaster' fear

The food and drug retail sector has been the hardest hit by economic turmoil this year with 33 per cent of the sector issuing a profits warning in the first quarter.

March, however, saw a dip in profit warnings but an Ernst & Young study predicts a rollercoaster ride for the sector this year.

January to March saw the highest pace of profit alerts in a first quarter since 2009. But, March saw the lowest number of warnings for nine years, as eurozone tensions eased and UK economic growth prospects started to improve.

Keith McGregor of Ernst & Young, said: "The UK's economic downturn towards the end of 2011, combined with heightening tensions across the eurozone, created a great deal of uncertainty at the start of the first quarter. This led to a flurry of profit warnings.

"By March, the pace of warnings had dropped dramatically. Liquidity injections and a Greek settlement, easing eurozone concerns, helped to inject a little confidence back."