Kesa Electricals, the retail group behind Comet, is deferring a share buyback programme and considering a freeze on recruitment after a slow-down in sales.

Shares in the company fell nearly 10 per cent to a record low of 157.75p yesterday as Jean-Noël Labroue, the chief executive, said that there had been a marked deterioration in trading conditions over the past six weeks.

Comet’s sales have slipped into negative territory on a like-for-like basis while Darty, Kesa’s French electricals business, has registered only modest growth after a near6 per cent increase in the three months to April.

“We have seen a continuing decline in consumer confidence and we are going to be very prudent and careful in planning for the rest of the year,” Mr Labroue said. “We are not depressed. We are not paralysed by this environment. I have been through this many times – it’s one of the advantages of being old – but we have to be careful and as flexible and adaptable as we can.” The group would be shelving projects that were not absolutely necessary in the short term. Executive directors were also being encouraged to cut back.

“I don’t want to see a story saying Jean-Noël is giving up his favourite bottle of Bordeaux, but, as we say in France, l’exemple viens d’en haut, the example comes from the top.

“You don’t change the carpet in the office, you don’t move HQ, you don’t repaint the walls in reception.”

He added that, although the group’s low share price meant that a buyback programme made sense, it also had to preserve cash for investment in new markets such as Italy and Turkey.

Kesa generated €550 million (£435 million) this year through the sale of BUT, its French furniture business, and had earmarked some of the proceeds for investors.

Yesterday’s bleak outlook came as Kesa reported a 1.8 per cent increase in underlying pretax profits to £128.8 million for the year to April 30. Revenue was up by 14 per cent at £4.5 billion.

Analysts cut forecasts and said there were growing fears that the consumer downturn in the UK could be spreading to continental Europe. Kesa’s sales in Spain, where it bought Menaje del Hogar last year, have been hit by a slump in the property market.

Philip Dorgan, retail analyst for Panmure Gordon, said: “We expect pretax profits to decline in the current year to £119 million. The year after we see a further decline to £101 million.”

Hugh Harvey, Comet’s managing director, said laptops and flat-screen televisions were selling relatively well, but demand for white goods was weak.

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