European retail shares slide to lowest since outbreak of COVID crisis in 2020

LONDON (Reuters) – European retail stocks fell on Friday to their lowest level since the onset of the COVID-19 pandemic in 2020, hit by a profit warning from online fashion retailer Zalando and data showing consumer confidence in Britain has hit a record low.

The STOXX 600 retail sector, poised for its fourth consecutive week of declines, hit its lowest level since March 2020. It was last down 1.4%, heavily underperforming the broader market, which was up 1.14% on the day.

Shares of German retailer Zalando plunged to a December 2018 low after the company on Thursday warned of weaker second quarter and cut 2022 outlook on deteriorating macro conditions. Zalando shares were down 12.8% at 0900 GMT.

European retail stocks have lost more than a third of their value since the beginning of the year. Data on Friday showed British consumers cut back on shopping in May in the face of fast-rising inflation, and a measure of their confidence sank to a record low this month.

Sales volumes in Britain in May fell by 0.5% on the month, a slightly smaller decline than the 0.7% drop expected by economists polled by Reuters. Britain’s longest-running gauge of consumer confidence, the GfK survey, fell to its lowest since records began in 1974.

(Reporting by Joice Alves and Julien Ponthus; Editing by Dhara Ranasinghe)