M&S woe sends shudders through FTSE

The sales woe at Marks & Spencer sent shudders through some of the FTSE 100 Index’s biggest retail stocks today.

With consumer spending prospects facing a growing squeeze from soaring food, petrol and energy bills, investors took the gloomy update as a fresh signal to sell stocks as a chill wind blew through the sector.

The FTSE 350 general retailers’ index fell more than 7%, while food retailers were more than 4% lower.

Alongside M&S – which shed as much as 21% – fashion chain Next’s shares slipped more than 7% as City analysts feared the worst.

Panmure Gordon’s Philip Dorgan advised shareholders to sell Next, saying: “The M&S trading statement reflects in part a sector-wide issue and we have reduced our forecasts to even further below management guidance.”

The broker also downgraded rival Debenhams on the back of the update, sending shares in the department store chain down more than 13%.

Meanwhile the news of a “significantly weaker” performance from the M&S food business also hit the UK’s biggest supermarkets.

Sainsbury’s fell 7%, while Tesco dropped 4%, although Morrisons – more value-orientated than its rivals – saw a smaller decline.

Other blue-chip casualties included B&Q owner Kingfisher as the fresh evidence of consumer belt-tightening hit home. Shares in the group lost more than 3%.