Europe retail stocks lower on Target’s latest warning
2022.06.07 16:16
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FILE PHOTO: A logo of food and clothes’ retailer Marks and Spencer (M&S) is seen at a branch in London, Britain March 10, 2022. REUTERS/Toby Melville
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LONDON (Reuters) – European retail stocks fell sharply on Tuesday, spooked by U.S. retailer Target Corp (NYSE:TGT) slashing its quarterly margin forecast for the second time in less than a month.
Target said it would have to offer deeper discounts and cut back on stocking discretionary items, as inflation dents spending, adding to the gloomy global consumer outlook.
Europe’s retail stocks index fell to more than a one-week low and was down 2.9% at 1229 GMT.
The drop in European retail shares weighed on the broader market with the benchmark index extending losses to stand 0.7% down on the day.
With the latest data showing headline consumer price inflation running at 8.3% in the United States, 9% in Britain and 8.1% in the 19-country euro zone, the outlook for shopper spending is grim.
In Britain, retail stocks had already been marked down by industry data showing shoppers cut their spending in May by the most since the country was in a coronavirus lockdown in early 2021.
Shares in UK clothing and food retailer Marks & Spencer (OTC:MAKSY) were down 3.8%, clothing retailer Next was down 2.8%, home improvement retailer Kingfisher (LON:KGF) was down 4.2% and supermarket group Tesco (OTC:TSCDY) was down 1.4%.
