Home Retail, Britain's biggest household goods retailer, posted a fifth fall in annual profit in a row, as its customers continued to bear the brunt of the economic downturn.
The owner of Argos stores and the Homebase DIY chain said today it made an underlying pretax profit of £91m sterling for the year to March 2.
Though that was in line with company guidance and analysts' consensus forecast of £90m, it was 10% down from the £102m made in the 2011-12 year.
That in turn was a 60% fall on 2010-11. Group sales were broadly flat at £5.48 billion.
Many retailers have been finding the going tough as consumers battle a prolonged squeeze in household incomes.
Home Retail has been particularly hard hit because its mainly low-income customers have suffered most and because it faces intense competition from specialist stores, supermarket chains such as Tesco and online retailers like Amazon.
Though operating profit at the 737-store Argos business rose 6.5% to £100.3m, it was still under half the £219m made in the 2010-11 year. It has, however, delivered three quarters of like-for-like sales growth, driven by robust demand for tablet computers.
That has raised hopes a transformation plan, launched in October, to reinvent Argos from a catalogue-led business to a digitally-led business is starting to work. The plan is targeting a 15% rise in sales by 2018 with a focus on online, mobile and tablet transactions.
At the 336-store Homebase business operating profit more than halved to £11m. The chain has struggled as constrained consumer finances has meant delayed home improvement projects, while weather patterns have also been unhelpful.
"Our view of the 2013/14 financial year is that it will remain similar to 2012/13 with consumer spending continuing to be impacted by ongoing inflationary pressures and low levels of consumer confidence," Home Retail said.
However, it said it was still in a strong financial position, ending the period with net cash of £396m and paying a full-year dividend of three pence, down from 4.7 pence last time.