A catalogue of errors for Home Retail Group as Argos sales up but not enough

Argos 1.2% sales growth fails to satisfy, falling short of owner Home Retail Group's expectations.

by Dave Waller
Last Updated: 05 Jan 2016

Argos has posted like-for-like sales up 1.2%, which marks the ninth consecutive quarter of sales growth at the store formerly known as the place with the plastic-coated catalogues and cute little pens.

Trouble is it still falls short of the 3% that had been expected. Much of what came was down to sales of computer games and TVs during the World Cup, which suggests the company may have to think of an alternative plan given we have a four-year wait till those balls are kicked on a global scale again.

Owner Home Retail Group has got used to this, and has made attempts to score a winner, even introducing a head of trends in August to bring its brands into step with modern retail. Argos, meanwhile, has been given a string of 'digital' concept stores, in which its famous plastic catalogues have been replaced by iPads. Whatever next?

Actually having the items on shelves for you to look at in person? Interestingly those upgraded shops fared no better than its traditional stores. Which is bad news for Argos, but good news for anyone who uses a sneaky flick through those laminated pages as a therapeutic link back to their childhood of shopping for He-Man figures and duvet sets with first division football teams printed on them. No one else?

Home Retail Group's Homebase chain fared little better. Having closed seven stores in the first half of the year, its total sales dropped 2.8%. Home Retail Group has been rumoured to be mulling a sale of Homebase to US private equity, but chief exec John Walden has pointed out that's a decision they haven't made. Still, we wonder whether there's a 'yet' missing from the end of that sentence.

Walden, who used to run Argos before taking over from Home Retail Group's longstanding chief Terry Duddy in March, didn't exactly help matters when he waded in and issued a warning on the lack of consumer appetite in the UK.

'There are still some questions in our minds as to whether we’re at the point of a broad-based, sustainable recovery,' he said. We can't help thinking that, once the answer to Walden's question has been brought round from the warehouse out the back for him to collect, he may be a tad disappointed.

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