Shares in UK restaurant chains were hit by the fallout after a shock profit warning from Clapham House, the owner of Gourmet Burger Kitchen and Tootsies.
Clapham House shares fell by nearly 50% after it said it planned to scale back new restaurants openings, which would hurt profits in 2008 and 2009.
It blamed rising food prices, high rents and an uncertain economic outlook that has pressured consumer spending.
Shares in rival Restaurant Group, which owns Frankie & Benny's, slid 12%.
Restaurant Group said its profit outlook had not changed despite the problems facing its rival.
By midday in London trade, its shares were down 11.24% at 193.5 pence.
Shares in Italian restaurant chain Carluccio's fell as much as 10% as investors feared Clapham House's warning spelled gloom for casual dining firms.
It shares later recovered somewhat, trading 3.74% lower at 154.5p.
Higher interest rates, which have risen five times since last August, and turmoil in global financial markets have made consumers more wary.
Trading down
Clapham House said that profit growth for the years to March 2008 and 2009 would be below expectations.
The group now plans to open 18 Gourmet Burger Kitchens (GBK) in the UK and overseas by March 2009, less than an earlier forecast of 25 to 30 outlets.
The news sent its shares tumbling 47%, to 131.5 pence, before they recovered slightly in afternoon trade to stand 41% down.
Clapham House said trading had been particularly poor at its 11 chargrill Tootsies restaurants located in shopping and leisure centres, as shoppers rein in spending.
Its high street outlets had fared better, the company said.
"GBK has done well, but it is cheaper than Tootsies at £10 a head. We think people trade down in a rockier economic climate," said David Page, Clapham House chairman told Reuters news agency.
'Severely hit'
Further evidence of a slowdown in consumer spending emerged as sofa retailer SCS Upholstery said that orders had fallen sharply.
Like-for-like sales orders - that exclude sales from stores opened this year - had dropped by 16% since the end of July, compared to a year earlier.
The firm blamed higher interest rates and the recent turmoil in financial markets.
"We believe that consumer confidence has been severely hit with regard to big ticket purchases," said Mike Browne, chairman of SCS.
^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©
~RS~q~RS~~RS~z~RS~41~RS~)