Topps Tiles sales for the past two months were 7 per cent down on the same time last year due to the “heightened political and economic uncertainty”.
The business said shoppers were being more cautious since the General Election had been called, following a relatively steady 12 months.
Chief executive Matthew Williams said: “At the start of the new financial year, trading conditions have become more challenging, with consumer demand weakening further since the General Election was called in late October.
“Against this backdrop of heightened political and economic uncertainty, like-for-like sales in the first eight weeks have declined.
“Whilst we expect external events will continue to weigh on consumer confidence for the immediate future, we remain confident that our market-leading retail offer and growing commercial operations give us a strong platform from which to deliver sustainable growth over the medium and long term.”
In its annual accounts, published today, the Leicestershire-based business said the recent weakening in consumer demand was “in line with our past experience”.
It said: “A reduction in political uncertainty will be key to the short term outlook improving.”
The annual results showed revenues were up 1.1 per cent to £219.2 million in the year to the end of September, while pre-tax profits were down 1.6 per cent to £12.5 million.
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Despite relatively flat results, the company was able to find £4.9 million to pay down its debt, year-on-year, to £11.3 million.
Topps Tiles, which has its headquarters in Enderby, next to junction 21 of the M1, said more than eight in 10 of the tiles it sells were its own brands, or ones that were exclusive to the chain.
It now has 362 stores, six less than last year, and has launched an online tool where customers can chose tiles and see how they would look in a kitchen or a bathroom.
Mr Williams, who is stepping down from the board on Friday, said: “This has been another year of strategic progress for Topps, with a resilient sales performance in our retail business and significant development in our commercial operations.
“In retail, our strategy of ‘Out-specialising the Specialists’ enabled us to deliver like-for-like sales growth and further enhance our market-leading gross margins in tough market conditions.
“In commercial, we saw significant year-on-year sales growth as we continue to invest in constructing a market-leader over the medium term.”
Shares in the business were down 5 per cent at 62p this morning.
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Mr Williams announced earlier this month that he was leaving the business, which was founded by his father, for a new challenge.
Her has worked at Topps Tiles for 20 years, including more than a decade as chief executive.
In that time he has rebranded the business and moved into the commercial sector, buying the Parkside business in Leicestershire and taking an 80 per cent stake in Strata Tiles earlier this year.
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Topps opened its first shop in Manchester in 1963 and remains the country’s biggest tiles retailer for DIY buyers and tradespeople.
He will be replaced by current chief finance officer Rob Parker.
Analysts at Liberum cut their forecast for Topps Tiles’s profit before tax by 10 per cent after the news this morning.
Downgrading the company’s target share price, they said: “A positive election result, bringing better macro and consumer optimism would give clear upside, but at this stage we prefer to set our estimates prudently.”