Home Retail Group hit by slow consumer spending
15 January 2009 09:58
Home Retail Group has seen its markets "significantly impacted" by the sharp reduction in consumer spending, according to chief executive Terry Duddy.
The business saw sales drop across both its Argos and Homebase brands in the 18 weeks to January 3rd, although cost saving initiatives mean that the company remains on-track for annual profits of approximately £320 million.
Like-for-like sales at Argos were down 7.5% in the period, whilst Homebase same-store sales were down 10.2%.
In a statement, Mr Duddy commented: "Our markets continue to be significantly impacted by the sharp reduction in consumer spending. Argos and Homebase saw sales declines for the whole period in line with those announced in October. In a turbulent trading environment, increased promotional activity and seasonal stock clearance resulted in additional pressure on gross margins.
"However, with continuing tight cost control, the group has delivered a robust financial performance. With two months remaining, we would expect group benchmark profit before tax for this financial year to be around the current market consensus of £320m, with further good cash generation also expected.
"As previously indicated, we expect the trading environment for the next financial year to be extremely challenging, but the group remains strongly positioned to extend its competitive advantage".
Retail news is updated every weekday and is provided courtesy of: 
