Argos and sister chain Homebase have again seen sales drop and margins hit by currency and shipping costs. After an 8.6% like for like sales drop in the first quarter, Argos sales dropped 8.6% in the 13 weeks to 27 August. Total sales for the half were down 7.6% at £1.676bn. The chain blamed the weakness of the electrical market for the majority of the decline.

The strength of Argos as a multi-channel retailer was shown by online sales making up 34% of turnover, up 2%. At Homebase fitted bedrooms provided one bright spot as displays and the installation service is rolled out. This sector ‘continued to perform well’ but ‘big ticket sales continued to be impacted by a challenging market’.

Like for like sales dropped by 3.1% in the second quarter, following a 1.6% rise the in the first 13 weeks. Total sales were 1.8% lower at £840 for the half.

‘Whilst continuing to plan cautiously, we are in good operational shape as we approach the Christmas trading period,’ says Terry Duddy, Home Retail Group chief executive.

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