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Argos like for like falls over 8%

By James Hall - Retail Week
Published: 5:30AM BST 11 Jun 2010

Weak sales of video games and televisions pushed like-for-like sales at Argos down by 8.1pc over the 13 weeks to May 29.

The poor sales saw shares in Home Retail Group, Argos's parent company, fall by 9.7 to 228.3p.

Home Retail also said that sales at its Homebase chain fell by 1.4pc over the period.

Terry Duddy, Home Retail's chief executive, said that the sales at Argos "are not what the company was expecting".

He said that part of the fall was down to "general economic challenges". However he added that slowing sales of video games and hardware has hit the entire market hard. He said that sales were down by 30pc over the quarter, on top of a 20pc fall last year. Likewise the sale of TVs has been sluggish. Mr Duddy said that strong comparative figures last year mean that sales of TVs were negative over the quarter.

He also warned that the football World Cup, that kicks off today, "will not be like the World Cup in 2006" in terms of increased sales. Despite this, Home Retail still sells one in five TVs in the UK.

In a research note, analysts at UBS said: "Argos like-for-likes of minus 8pc were weaker than our minus 5pc estimate. As well as pressure on consumer confidence and annualisation of various stimuli to disposable income, sales were weak against tough comparatives in gaming and TVs."

Mr Duddy said that the difference in turnover between what the City expected and what was actually delivered was only £35m.

He said that if the Government increases VAT in an effort to plug the deficit, retailers need time to prepare.

18 June 2010
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Martin Elliott. Chief Executive - Home Hardware.

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