Home Retail Group has revealed a better than expected sales performance in its first quarter as it grew market share and benefited from the warm weather.

In the 13 weeks to May 30, like-for-likes at Argos declined 2.8 per cent while Homebase like-for-likes increased 3.8 per cent – the first quarterly increase for the DIY retailer since 2007.

Total sales at Argos improved 0.9 per cent to £937m while sales at Homebase jumped 5.8 per cent to £465m.

Home Retail Group said it gained market share in the DIY market, although chief executive Terry Duddy could not say whether Homebase took share from B&Q, Wickes or Focus due to the nature of the GfK data that measures the market share.

He said: “We took a small element of market share. We don’t know where we’re gaining it from but somebody in the shed market must be losing it.”  

At Argos, margins declined 75 basis points, while Homebase margins declined by around 250 basis points, with both falls driven by the sales mix. Home Retail Group continues to expect that the impact of adverse currency movements on the gross margin rate for both chains “will increase through the course of the year”.

Argos experienced “good growth” in consumer electronics and toy sales were “strongly ahead”. However, furniture and homewares continued to show double-digit declines.

Multichannel sales accounted for 42 per cent of total Argos sales and, within this, online Check & Reserve sales soared 45 per cent.

At Homebase, seasonally related products experienced double-digit growth and accounted for around 40 per cent of sales. The retailer said weather patterns resulted in the year-on-year demand being “particularly strong” in March and April. However, sales declined in May.

Kitchen sales at Homebase continued to be strong, driven by the exit of MFI from the market as well as an improved offer. Sales for the remaining categories were “only marginally lower than the first quarter last year”.

Duddy said: “Argos and Homebase each enjoyed better than expected sales in the quarter and grew market share. Homebase in particular saw its performance in gardening and outdoor products benefit from the excellent weather conditions. At this early stage of the financial year we continue to plan cautiously, with our trading focus remaining on driving cash gross margin and achieving further cost efficiencies.”