British consumer facing stocks have been the worst hit in the year since the U.K. voted to leave the European Union, as retail sales falter in the face of the impending divorce.
Retailers Next (NXGPY) and Kingfisher (KGFHY) were among the worst performers on the U.K.'s benchmark index, the FTSE 100, in the year since the Brexit vote, Hargreaves Lansdowne Analyst Laith Khalaf said in a Friday note.
Clothing retailer Next has lost 27.3% since June 23, 2016 and DIY retailer Kingfisher has lost 17.5% of its value.
Retail sales grew at their slowest pace in four years in May, according the Office for National Statistics, with sales volumes down 1.2% month on month. This comes as inflation in the month hit 2.9%, up from 2.7% in April.
The dichotomy in the U.K. markets, with the FTSE 100 dominated by companies which have seen their earnings growth due to the 15% fall in the pound over the year, while the FTSE 250 is populated with domestically focused companies.
"The KPMG Non-UK 50, which represents the largest companies with more than 70% of their market outside the UK, is up a remarkable 28% since the EU referendum - significantly outperforming the world's largest indices, while the FTSE 100 climbed 17% over the same period," Yael Selfin, chief economist at KPMG in the U.K said.
"In contrast, the KPMG UK50, which represents the largest FTSE companies with over 70% of their market in the UK, is down 5%. Put in pounds and pence, this equates to a £330 billion rise in the value of the KPMG Non-UK50 and a £19 billion loss for their domestic equivalent."
However, the performance of the U.K. benchmarks has been muted compared with international indices - the S&P 500 has seen a 38.2% increase over the year, and Paris's CAC 40 and Frankfurt's DAX have seen values increase by more than 40%.
Hargreaves also pointed out that the strong performance of the mega cap companies -- including Unilever (UL) - Get Report , HSBC (HSBC) - Get Report , Shell (RDS.A) and Diageo (DEO) - Get Report -- has led to a further concentration of the benchmark index, with the biggest 10 stocks now accounting for 46.1% of the index, compared with 42.7% on June 23, 2016.
"So while the day to day movements of the index may still serve as a quick litmus test of market sentiment, the headline FTSE 100 index is not always a good barometer of the fortunes of the U.K. economy, or indeed the typical U.K. investor," Khalaf warned.