Shares in Home Retail Group, owner of Argos and Homebase, fell by almost 5% after it reported declining sales of TVs, tablets and other electrical goods, despite opening new stores.
The sales slide at Argos continued through June to August, although at a slower pace than earlier in the year. Argos recorded £897m worth of sales over the summer, a decline of 2.8% on last year– a better performance than the 3.9% fall over its first quarter, but still below City expectations.
Total sales at Argos also fell, despite the addition of 52 stores – 44 concessions at Homebase and a further eight in Sainsbury’s.
Although Argos reported a good performance in toy sales, it was not enough to offset declining sales of electrical and white goods.
Homebase fared better, recording a 5.9% upswing in year-on-year sales to £378m for the second quarter, making £816m worth of sales over the first half of its financial year.
Home Retail Group’s share price slid almost 5% to 141.5p after the results were announced. Its shares have shed 25% over the past year amid persistent weak sales at Argos, which makes up 70% of group sales.
Home Retail warned the City in April that Argos was likely to experience a difficult summer, as it revamps stores to attract customers used to online convenience. Stubby pens and paper slips are being swapped for touchscreen tablet computers, as the retailer opens 200 “digitally enabled” stores.
John Walden, chief executive of Home Retail, said Argos had made good progress with new stores, which showed “encouraging” early results. He warned that the Christmas trading period was looking “less predictable than usual due to a less certain promotional environment”.
