The FTSE 100 was down 0.2% to 7,590.3 in early afternoon trading as the market appeared to brush the Boris Johnson confidence vote off its shoulder and move ahead to more pressing issues, including hard times on the horizon for consumer-facing businesses.
Figures from the British Retail Consortium (BRC) announced today reported a 1.1% fall in sales across May, marking the second consecutive monthly decline.
“The pressure on households from rapidly rising prices is reflected in weak retail sales data for May and figures from Barclaycard showing spending on essentials like food, fuel and utilities bills is going up rapidly,” said AJ Bell investment director Russ Mould.
“This will send a chill down the spine of any consumer-facing businesses which are dependent on discretionary spending.”
JD Sports shares were down 5.9% to 115.9p on the back of the Competition and Markets Authority (CMA) revealing it had found the retailer and Elite Sports guilty of fixing prices for Rangers Football Club merchandise.
The company currently estimates a £2 million hit on its financial statements to cover the legal costs for its regulatory violation.
“Fresh from the probe into its ill-fated takeover of Footasylum, which was a contributory factor in the departure of long-standing boss Peter Cowgill, the regulator has put the company on the back foot over fixing the price of sales of Rangers FC replica kit,” said Mould.
“The size of the provision to cover any resulting liabilities is modest but, nonetheless, this is an unwelcome distraction as the business looks to reset in the wake of Cowgill’s exit.”
Supermarkets suffered a blow as the rate of 4.3% food inflation impacted consumer wallets, with Ocado sliding 3.5% to 917.8p, B&M falling 2.9% to 371.7p, Sainsbury’s down 1.9% to 223.3p and Tesco dipping 1.7% to 256p.
Retailers saw investor interest depart as inflation rates and the rising cost of living devoured consumer expendable income, with DIY giant Kingfisher dropping 4.3% to 255.1p, and fashion company Next declining 2.8% to 6,313p.
Meanwhile, US markets prepared for interest rate hikes on Friday, yet appeared rather steady, with the NASDAQ up 4% to 12,061.3 and the NYSE up 0.3% to 15,848.4.