Home Retail suffers as TV and video game sales slump

HOME Retail Group posted a bigger-than-expected drop in first-quarter sales at its catalogue-based Argos stores, hit by a drop in demand for video games and televisions.

The group, which also runs the Homebase, said economic conditions were challenging and uncertain but that it was still aiming to deliver flat profits over the full financial year – in line with its previous guidance and helped by cost cutting.

Sales at Argos stores open at least a year dropped 8.1 per cent in the 13 weeks to May 29.

Analysts had expected underlying sales to fall between three and five per cent.

Like-for-like sales at Homebase, Britain's second-biggest home improvements chain behind Kingfisher's B&Q, fell 1.4 per cent – slightly less than analysts' expected.

Chief executive Terry Duddy said: "Economic conditions remain both challenging and uncertain, with this quarter proving difficult in terms of consumers' willingness to spend.

"The comparable period last year also contained some strong sales growth and share gains in certain product categories, particularly in consumer electronics at Argos.

"For Homebase, this quarter represented a good outcome to its peak trading period."