General merchandise giant Home Retail expects full-year profits to be at the upper end of expectations after sales at catalogue chain Argos held up over Christmas.

However, Home Retail chief executive Terry Duddy warned that toughening trading conditions would make sales “harder to come by” in the short term.

Turnover climbed to£1.92 billion in the 18 weeks to January 5, as total sales advanced 2.5 per cent and like-for-likes slid 0.2 per cent.

Duddy said: “Argos’s broad product mix, strong value credentials and multichannel leadership have shown clear strength over its peak trading period.” Profits are likely to come in at about£430 million for the year.

He added that Argos had performed more strongly in distinct categories, such as technology, than specialist rivals and attributed much of that success to multichannel services such as Check & Reserve.

“It gave people the certainty that what they wanted would be there, rather than them having to chase up and down the high street,” said Duddy.

On the Thursday before Christmas alone, 250,000 Check & Reserve orders were received. Over the Christmas period, internet orders accounted for 23 per cent of Argos’s sales.

Duddy expected difficult trading conditions to last for the whole of 2008, but said Argos was well-placed to ride the turbulence. The retailer will issue its new catalogue on Saturday. Prices on re-included lines have been cut by 4 per cent overall.

Like-for-like sales at Home Retail’s Homebase DIY chain slid 6.3 per cent over Christmas, although big-ticket items – particularly kitchens – achieved positive growth overall.