HOME Retail Group yesterday said that cash-strapped customers were abandoning its cut price retailer Argos as sales dopped.
The company, which also owns Homebase, revealed that its overall profit had dropped 12 per cent to £103m in the six months to 28 August.
A plunge in demand for furniture, video games and televisions contributed to the £14m drop. Like-for-like sales at Argos fell 6.5 per cent and were down 0.8 per cent at Homebase. Total sales fell three per cent to £2.7bn
Homebase escaped steep falls as improved ranges of garden furniture and BBQs cited as reasons for the slower decline.
Terry Duddy, Home Retail’s chief executive, said that £39m of cost-cutting had contributed to a slower profit decline than otherwise would have been achieved, and remained positive about the busy Christmas period.
He said: “We are about to enter our busiest trading period, and whilst we are planning cautiously, we do so from a position of operational and financial strength.”
The company said that the Argos iPhone app has been downloaded more than 850,000 times since its launch in May and now represents around one per cent of sales. Internet sales at Homebase, including its new “Reserve & Collect” service, grew by 40 per cent in the first half of the financial year and represents four per cent of sales. Home Retail Group is now pressing ahead with a number of store revamps, with plans to complete refurbishment of over 100 Argos stores in time for Christmas, the group’s busiest trading period.