Parent Home Retail also revealed that there are likely to be “substantial write-downs” at Argos’s stablemate, home enhancement chain Homebase.
Argos’s comparable store sales fell 5.8 per cent in the period to£927 million. First half sales were down 3 per cent to£1.86 billion.
Although the retailer managed to grow its electronics business, this occurred at a slower rate than during the previous quarter. Sales of furniture and homewares were both down.
Home Retail chief executive Terry Duddy said that the last time Argos had suffered such a like-for-like sales decline was 1999, but was confident that first half benchmark profits would meet expectations.
He said performance was “reflective of a difficult consumer environment”. The impact of food inflation has been flattering retail sales data overall and many non-food groups have been having a tough time. “We’re performing comparatively well,” he maintained.
Homebase’s like-for-likes were down 8.3 per cent for the quarter, an improvement on the previous quarter’s 12 per cent decline, resulting in first half revenues 10.3 per cent down to£829 million.
The retailer said: “In light of market conditions, the carrying value of Homebase’s assets, including goodwill, will be assessed as part of the half-year audit review. This is expected to lead to substantial write-downs, which would be recorded as exceptional items and therefore excluded from benchmark profit measures.”