ARGOS has suffered flat sales following a “volatile” Christmas trading period in which high demand for Black Friday promotions skewed its performance.
Parent group Home Retail said yesterday that the chain’s like-for-like sales for the 18 weeks to 3 January were broadly unchanged at 0.1 per cent higher, as strong TV and video gaming sales offset a decline in jewellery. Total sales lifted 0.8 per cent to £1.8 billion.
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Chief executive John Walden said takings at the catalogue business were up by 45 per cent on Black Friday after it received more than 13.5 million visitors to its digital channels, three times last year’s number of visitors.
But he added: “The draw of discounts affected trade both before and after that busy weekend as consumers satisfied their Christmas shopping lists with bargains.”
As a result of the trading volatility, Argos pursued a more cautious trading stance over the festive period to protect margins.
Home Retail’s DIY chain Homebase saw total sales fall 2.7 per cent to £451 million, as the group closed 12 stores in the period, in line with its October plan to close a quarter of its 323 stores by 2018 due to poor sales performances. Like-for like sales at Homebase rose 0.6 per cent.
The group stressed that it remains on track to meet full-year profit targets.
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A number of Argos stores have been refitted over the past 12 months and now include fast-track collection and ordering from iPads rather than catalogues.
Stephen Ward, commercial director of retail consultancy Conlumino, said the decision by Argos to limit promotions meant that the growth it attained was done so profitably and with a reasonable improvement to margins.
He said: “However, there is a slight concern that a less aggressive stance on pricing – in a year that promises to be cut-throat in terms of promotions – will alienate some core Argos shoppers and damage growth. Ultimately, even with margin improvements, this could start to cost the company profit.”
Argos trades from 756 stores while the Homebase portfolio has been reduced to 304 outlets.
Meanwhile, moves to turn round Mothercare’s UK stores appears to be paying off after itreported a return to festive sales growth.
The company, which owns the Early Learning Centre brand, said UK like-for-like sales rose 1.1 per cent in the 13 weeks to 10 January as it limited promotional activity and delayed its end of season sale until Boxing Day.
The trading updates came as it emerged that the number of shoppers hitting Scottish stores rose by 1.6 per cent, year-on-year, last month. That improves on the 0.9 per cent gain seen in November, though higher footfall numbers do not always translate into improved sales. December’s rise was driven by high streets and retail parks, with shopping centres seeing a decline in footfall.