Further signs of weakening consumer spending came from Clapham House the restaurant group which warned profits in the current and next financial year would be "significantly" below its original expectations.

The owner of the Bombay Bicycle chain of Indian Restaurants and the Gourmet Burger Kitchen restaurant group cut back its expansion plans in the face of the uncertain economic outlook and said its debt was higher and costlier than it had expected.

Shares in the group nearly halved in early trading on Monday as analysts raced to slash profit forecasts. The shares were down 47 per cent at 132½p, a fall of 116p.

The group, which also operates The Real Greek and Tootsies outlets, said it would report interim results on Wednesday which would show a rise in adjusted pre-tax profits from £1.2m to £1.5m. It promised a full update then.

It blamed weak consumer spending, food price inflation and higher rents for new restaurants for its difficulties. However, it said it still anticipated "strong growth" for the years to March 2008 and 2009.

David Page, executive chairman, said "we remain positive about the medium-term demand trends for the UK eating out market."

Clapham House becomes the latest business with exposure to the consumer market to warn. ScS Upholstery, a 100-year old furniture retailer, also warned on Monday that sales were slowing. Last week DSG International, the owner of retailers Currys and PC World, blamed a fall in the sales of white goods for a 25 per cent drop in underlying profits and Pendragon, the car dealership, also warned.

Clapham House said it would now open fewer restaurants than planned and concentrate its expansion on the GBK brand. It plans to open only 18 restaurants in the year to March 2009, of which 5 will be outside the UK. This would "substantially reduce" its growth expectations for the 2009 financial year. Analysts had been expecting about 30 UK openings in the 2009 financial year.

Sales in Tootsies, which the group had warned in September were weaker, had been exacerbated since by poor trading in the 11 restaurants sited in shopping and leisure centres. Clapham House said it attributed this to pressure on UK consumer spending. As a result, the contribution to profits from Tootsies was likely to be "significantly" below its budgets.

The group's plan to open a Real Greek and a GBK restaurant in the new Spitalfields Market development on the edge of the City of London, had been delayed for 12 months by the landlord and would not open until well into the next financial year. Clapham House had been expecting the two to contribute £500,000 to current year operating profits.

The interest charge for the year would be £200,000 more than expected because of higher rates. Net debt at the end of September was £13.3m, higher than expected following the plans to open 21 GBK restaurants in the current financial year.

The news affected other restaurant stocks, with Domino's Pizza shares down 11 per cent or 21¼p at 173p, and Restaurant Group, which owns the Chiquito and Garfunkel's chains, was down 8.4 per cent or 18¼p at 199¾p.