London-listed retailers plummet on expected spending cool down

An expected slowdown in consumer spending in response to the cost of living crunch hobbling household finances has whacked London-listed retail stocks.

The bucket of top retail shares in the City, known as the FTSE 350 retail, has fallen 21 per cent in the year so far, making the sector one of the worst performers among all stocks.

The sharp decline is primarily “a function of rising energy costs and the squeeze on the consumer,” analysts at Goldman Sachs said.

UK households are expected to cut discretionary spending as a result of living standards eroding at the steepest pace in 66 years due to wages failing to keep pace with an annual inflation rate of over seven per cent. 

“We would be cautious on more vulnerable consumer stocks… but for those that can maintain margins we think there is value,” Goldman’s analysts added.

Goldman recommends clients buy high street fashion retailer Next.