Home Retail, the retailer at the centre of a bidding war, said sales at its Argos stores open over a year fell 1.1% in the eight weeks to February 27. 

This was an improvement on the year overall and the performance was helped by the company's upgraded home delivery service.

The company is being pursued by British supermarket Sainsbury's and South African group Steinhoff International. 

It said the stronger finish to the year put it on track to report profit before tax in line with market expectations of £93m. 

Last month Sainsbury's had a £1.3 billion bid for Home Retail trumped by Steinhoff. Both suitors have been given until March 18 to formalise their offers.  

Home Retail said today that total sales at Argos rose 1.9% to £515m in the eight-week period, as demand for furniture and sports goods offset lower sales of electrical products.

Like-for-like sales in the period were impacted by the opening of 90 net new stores over the year, the company said today. 
              
Chief executive John Walden said he was pleased with the continued improvement in Argos' sales performance, and the progress the group was making online. 

Sales through Internet channels, including reserving items for store collection and home delivery, grew 13% in the period, representing just over half of total Argos sales. 

On February 27 Home Retail completed the £340m disposal of its Homebase home improvement business to Australian group Wesfarmers, leaving it with just the Argos business.