Argos sales slump on shoppers’ caution

SALES at catalogue giant Argos slumped a further 7.1 per cent in the second quarter as its cash-strapped customers held back on buying electrical items such as TVs and game consoles, parent company Home Retail Group said yesterday.

But shares in the firm rose 2 per cent to 117.8p as investors, who have seen the value of their holdings in Home Retail almost halve over the past 12 months, were cheered by a more positive outlook for the rest of the year.

Chief executive Terry Duddy, pictured, said: “We’re expecting a better Christmas quarter than the one we’ve just finished.”

He argued that the firm was in “good operational shape” as it approached the most important trading period of the year and said there was “a bit of optimism” electrical sales would pick-up in the second half.

Sales at Argos fell to £859 million in the 13 weeks to 27 August, with two thirds of the decline put down to a slump in the consumer electronics category. However, the sales drop eased slightly from the first three months of the year when total sales dropped 8.1 per cent.

At Home Retail Group’s other major chain, Homebase, the falls were less severe, with total sales down 3.8 per cent to £382m in the quarter but the firm highlighted that appetite for “big ticket” items “continued to be impacted by a challenging market”.

“Overall the performance in the quarter was in line with our expectations,” Duddy said.

NATHALIE THOMAS