Argos and Homebase sales slump hits Home Retail Group
Home Retail Group has reported sharp falls in sales at both its Argos and Homebase chains as weaker consumer spending takes its toll on another High Street retailer.
Like-for-like sales in the 13 weeks to 27 August fell 8.6% to £859m at Argos, and by 3.1% to £382m at Homebase.
Weak consumer electronics sales explained "the majority" of the drop at Argos, the group said.
Despite that, shares in Home Retail Group jumped 10% only to end up 2%.
On a total sales basis, sales at Argos dropped by 7.1% and at Homebase by 3.8%.
"Overall, the performance in the quarter was in line with our expectations," said group chief executive Terry Duddy.
"Argos' sales continued to be impacted by the decline in the consumer electronics market, while at Homebase, after a good first quarter which saw strong seasonal sales, the second quarter was more challenging."
Mr Duddy did, however, say that the group was in "good operational shape" as it approaches the key Christmas trading period.
Despite the fact investors had expected a bigger drop in sales, analysts said the company faced a difficult road ahead.
Keith Bowman from Hargreaves Lansdown Stockbrokers said the outlook for the group remained "extremely difficult".
"Pressure on the group's low-income customer base shows no sign of abating, while moves over recent years by the supermarkets into the electrical arena have arguably increased over-capacity," he said.
A number of retailers are struggling in the current difficult trading environment.
Electrical goods firm Dixons reported a sharp fall in quarterly sales on Wednesday.
Figures from the British Retail Consortium on Tuesday suggested UK retail sales fell in August, as weak consumer confidence and high inflation undermined High Street spending.