HOME Retail Group, the owner of Argos and Homebase, issued a profit warning yesterday, saying worried shoppers were reining in their spending.
The company said that it now expected pre-tax profit for the year to 26 February to be between £250m and £255m. In January it had forecast full-year year profit of about £263m, down from £293m in 2009-10.
Chief executive Terry Duddy said: “There are clear signs of further pressures on consumer spending, with recent trading conditions, particularly at Argos, proving to be more difficult and volatile than we anticipated.”
In the eight weeks to 2 February, sales at Argos stores open for a year or more dropped 4.6 per cent as consumers cut back on non-essential spending in the face of tax rises, inflation and job losses. This follows a fall of 4.9 per cent in the 18 weeks to 1 January.
DIY and gardening chain Homebase performed better with like-for-like sales up 3.8 per cent in the eight weeks to 26 February. Shares in Home Retail, which last September lost its place in Britain’s FTSE 100, have lost nearly a quarter of their value over the last year.