Carpetright is floored as the going gets tough on the high street

Carpetright shares tumbled almost 6% on Tuesday as the flooring retailer warned conditions were “getting harder” on the high street.

Chief executive Wilf Walsh said the past 12 weeks had been tough, partly down to the later timing of Easter and the wider economic backdrop.

“There is some evidence it is getting harder out there in terms of consumer spending, inflation and wage inflation.”

Walsh added that the company had had to adopt some “margin-sapping” tactics to fight off competition from new entrant Tapi, which is run by Carpetright founder Lord Harris’s son Martin Harris.

Carpetright has offered free fittings and invested in stores located near those of its rivals in response. Sales in UK stores open for more than a year rose by 1.4% in the fourth quarter, slower than the 1.9% it reported the previous quarter.

Full-year profits are expected to be at the lower end of expectations. Analysts have forecast underlying pre-tax profit of between £13.9 million and £16.2 million. The shares dropped 14.1p to 230.9p.

Fourth-quarter sales figures fell short of analysts’ predictions, but most focused on the revamp of Carpetright stores. Sales growth at the new-look stores is 5.8%.

Broker Peel Hunt said: “There is now a clearer trend in performance coming from the new-format stores, which we expect to deliver greater self-help momentum.”