Home Retail hit by consumer spending slowdown

Home Retail, formerly known as the Argos Retail Group, has warned that its Homebase DIY chain is seeing a downturn in sales and expects ‘restricted growth’ at Argos stores as consumer spending declines.

The downturn at Homebase has been affected by the slowing property market. Terry Duddy, the group’s chief executive, said everything but kitchens had a tough time.

However, the group told investors that the financial year, which ended at the beginning of March, had produced ‘double-digit earnings growth’ in line with City predictions. This indicates a 14% profit growth to around £429 million.

Mr Duddy said the last year turned out better than we had expected, but in the coming year, like-for-like growth is going to be very hard to achieve.

In the 8 weeks to December 31, same store sales at Argos increased by 1.9% but this was partially due to an early Mother’s Day and January sales which had pushed profit margins down by around 0.5%, concluded Mr Duddy.

Home Retail Group is the UK’s leading home and general merchandise retailer and generated sales of over £5.5 billion in the last financial year. The group employs over 50,000 people and has more than 1,000 stores throughout the UK and Republic of Ireland.

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