Game Group profit hit as price promotions weigh

 
City A.M. Reporter
COMPUTER games retailer Game Group said its profit margins would fall by more than expected as it steps up promotions to lure cash-strapped shoppers and maintain share in a cut-throat competitive market.

Game, which has been hit by the absence of new games console launches this year, said yesterday sales trends had improved in recent weeks, helped by new title launches such as “Call of Duty: Black Ops” and “FIFA 11.”

It also has high hopes for Microsoft’s Kinect motion-sensitive gaming product, which Britain’s biggest retailer Tesco tipped to be a top-seller this Christmas.

However, Game said hard-pressed shoppers were becoming ever more focused on bargains, and it remained cautious about the outlook for 2011 amid a continued lack of new console launches.

“Consumers appear to be more deal hungry, more value-seeking than perhaps they were even last year,” chief executive Ian Shepherd said. Britain’s retailers are worried that higher taxes and public spending cuts aimed at reducing government borrowing will hit consumer demand in the months ahead.