Home Retail, Britain's biggest household goods retailer, posted a worse than expected fall in first-quarter sales at its Argos business as its cash-strapped customers slowed spending on big ticket items.
The group said sales at its catalogue-based Argos stores open at least a year slumped 9.6% in the 13 weeks to May 28. That compares with analyst forecasts for a fall of 4-7%.
'Trading conditions, particularly at Argos, have proved to be more difficult and volatile than anticipated,' said chief executive Terry Duddy.
The weak performance of Argos was partially offset by a like for like sales rise of 1.6% at the group's Homebase do-it-yourself chain. Analysts had forecast a rise of 1-2.5%.
'While we remain cautious for the balance of the financial year, we are focused on our operational performance while continuing to invest across the businesses,' Duddy said.
Home Retail has previously forecast a low-to-mid single digit like-for-like sales decline at Argos in the 2011-12 year, with like for like sales at Homebase broadly flat.
In April the firm announced plans to expand into TV shopping, books and childrenswear. It said it would continue to invest to prepare for an eventual consumer recovery.
