Home Retail hit as consumers desert Argos

20th Oct 2010 07:12

A fall of almost a third at its Argos chain sent interim profits tumbling at retailer Home Retail with sales of furniture, TVs and video games all down sharply."Spending in our markets has remained in decline. Many consumers continue to face pressures on the amount of household cash flow that is available for discretionary goods purchases, and in general there is less confidence to spend given the uncertain outlook," chief executive Terry Duddy said.Underlying profits in the half year to August fell by 23% to £95m with pre-tax profits down from £117m to £103m. Sales fell by 3% to £2.72bn with like-for-like sales down 6.5% at Argos and 0.8% at Homebase, its other core business."Homebase has completed another good performance in its peak trading period. At Argos, its core customers have been under greater pressure and there were some particularly challenging conditions in certain product categories," Duddy added.Profits at Argos fell from £79.7m to £54.4m, blamed on a decline in big ticket furniture, video gaming and in televisions even though the football World Cup improved sales. Computers, white goods and toys showed good growth, while small ticket homewares sales were ahead.Things were a little better at DIY chain Homebase, though profits still fell from £48.9m to £46.2m. Seasonal categories were marginally ahead. 'Big ticket' sales were also ahead, with growth in kitchens, bathrooms and bedrooms, but sales elsewhere declined."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," Duddy said. The interim dividend is maintained at 4.7p.