The discount fashion chain store that became a success story on high street has had its bubble burst.

Primark, whose expansion drive has placed them on many British shopping lists, has reported slow summer sales as consumer confidence took a battering.

Shares in Associated British Foods (AB Foods), the firm’s parent group, fell 1.5 per cent as the news became known of marked slowdown in sales growth.

While full-year budgets and profit earnings for the retailer are still on track to beat forecasts, Primark warned that tough times lie ahead as increased living costs and the impending VAT changes would spell trouble times in 2011. The fashion industry is now bracing itself for the next round of sales updates from fellow high street staples Next and Debenhams, due out next week, with analysts anticipating that similar grim outlooks will be commonplace.

The Primark chain, which consists of 204 retail outlets, makes up one-third of the group’s profit at AB Foods. Its like-for-like sales slowed in the three months till mid-September by around 4 per cent, meaning the year now sits at an increase of 6 per cent following the 8 per cent first half performance.

John Bason, AB Foods finance director, said that the previous fourth quarter sales, made longer by an Indian summer in 2009, meant that the last quarter showed a decline of closer to ten per cent. Bason added that Primark would remain cautious in the way it handled the outlook and the UK consumer.

The man behind the expansion of Marks and Spencer into India has teamed up with a local competitor.

Mark Ashman, who oversaw the establishment of the joint venture in India between M&S and Reliance Retail, will become the chief executive at Hypercity in the autumn.

Hypercity is a rapidly growing local chain that has since 2006 sold Waitrose products to millions of Indians under an exclusive supply agreement. Waitrose and M&S are already renowned for their UK rivalry, and now the battle has spilled over onto the subcontinent the focus is firmly on India as a producer.  Last year, Mark Price, Waitrose’s chief executive and Sir Stuart Rose, the chairman of M&S, became embroiled in a public slanging match over which company’s products were cheaper.

Mr Ashman held the role of chief executive of Marks & Spencer Reliance Retail, which, in collaboration operated 18 stores across India, with 15 more set to open over the next two years. The partnership said that there will be an estimated 50 M&S stores in the country by 2015. Ashram had left his position in April to return to Britain to lead M&S’s European and Middle Eastern operations. He was wished all the best for his new role by his former employers.

Meanwhile, rival Hypercity operates seven hypermarkets across India, with the group being part owned by another of India’s leading retail organisations Shoppers Stop. The country has had its fashion production industry come increasingly under the media spotlight in recent months, as allegations of poor working conditions have led high street retailers such as Next and Gap to launch independent investigations.

Leading fashion retailers H&M and Zara will both go live online in September.

From next month, shoppers who are based outside of the London store range will be able to buy their favourite outfits via the internet as the clothing providers attempt to buck the increasingly dour trends hitting the high street.

Zara, which is owned by the Spanish company Inditex, will launch its new website simultaneously across the UK, Spain, France, Portugal and Italy on September 2, and while they have previously offered a range of homewares online, the revamped website will mark the debut of fashion lines that have in the past been only available in-store. H&M will launch its new online venture a fortnight later, offering men’s, women’s and children’s clothing in addition to their own range of homeware.

The current gloom facing that has beset consumer confidence in the UK and across Europe has led several major retailers to warn that widespread cuts in public sector spending will have a knock-on effect for individual customers. The recent austerity budget from Chancellor George Osborne had created increased worry across the UK over employment and wage prospects, leading to a tightening of the purse strings.

Both Marks & Spencer and Next have warned that consumer spending is likely to be constrained in the coming months as the new coalition government’s emergency budget combines with the rise of VAT at the end of the year to keep customers out of high street shops.

Several of the leading British fashion retailers are launching inquiries into allegations of substandard working conditions in India.

The move comes at a time when the same high street stores, including Marks and Spencer, are embroiled in a wage dispute crisis in Bangladesh that has seen garment workers stage violent protests.

Marks and Spencer has been joined by other well-known stores Next and Gap in launching investigations into their Indian suppliers, after allegations have emerged that young children have been left unattended as parents work in factories on the outskirts of the capital Delhi. According to a report by the London Observer, the fashion houses are responding to claims that these factories have been using middlemen to hire workers for just 25p per hour for Next and Gap, and 26p per hour at for Marks and Spencer. Some workers have also alleged that they have been paid under half of the legal overtime rate.

The trio of retailers have each pledged to end the practice of reportedly excessive overtime which Indian labour laws states is a clear breach of the ethical trading initiative (ETI). The three have apparently advised the Observer that abuses in their supply chains would not be tolerated and that they are 100 per cent committed to ethical trading.

While Marks and Spencer has stated it has not as yet been presented with the appropriate evidence to support the allegations, Gap has advised that it had discovered irregularities with wage violations and ordered its supplier to pay the appropriate compensation to those affected immediately.

The trend of retailers selling high-heels to young girls has parenting groups concerned that children are being sexualised prematurely.

The trend, which can be traced back to the three-year-old daughter of Katie Holmes and Tom Cruise – Suri – has seen high street shops target the new audience, after Suri has been photographed regularly sporting sparkled heels. Next, GapKids and Asda are all among the major retailers to offer heels for tots.

However, some parent’s groups have declared that some of the footwear on sale was more appropriate for a lap-dancing setting rather than the kindergarten, leading them to claim that such items prematurely sexualise young children. Retailers are being encouraged to take a closer look at what they are offering and ask themselves – is it really appropriate?

Tesco has also come under fire for selling a school shoe with a two-inch heel, which can be detrimental to the growth of a young child whose feet are still developing. While it is accepted than children mimic adults, the fear is that they may be growing up too fast too soon, according to the group mumsnet, which has launched a campaign – Let Girls Be Girls – to get retailers to sign a new code of practice agreeing not to prematurely sexualise young kids.

Fellow parenting group Netmums also suggested that putting a three-year-old into heels is a recipe for disaster, with young girls likely to topple over and cause themselves an injury. Podiatrists have roundly denounced the practice of children in heels, claiming that anything over 2cm may affect growth and development.