Despite the economic pressures, which have resulted in Homebase and Argos parent Home Retail Group posting a £394m annual loss before tax, chief executive Terry Duddy says Homebase is "well positioned across the broad home enhancement market".


His statement, in the company's annual report, published today, said: "Total consumer spending in the £60 billion home and general merchandise market declined marginally in calendar year 2008. Within individual product categories we have typically held or gained some share; however, our greater relative exposure towards some of the weaker markets such as furniture, homewares and DIY resulted in our overall 10% share of the total market remaining unchanged.

"Looking ahead, we continue to expect a difficult trading environment for the product markets in which we operate. We remain in a position of planning cautiously in respect of the outlook for consumer confidence in general and for the level of discretionary household spending.

"In addition to reduced consumer demand, there are also further retail industry-specific pressures. Given the weakness of sterling, the cost of goods for the majority of home and general merchandise products will increase for virtually all UK retailers. A further area of pressure will be the likely continued cost inflation that retailers face. Against this difficult economic backdrop, Home Retail Group, as the UK's leading home and general merchandise retailer, will continue to pursue a strategy to further its competitive advantage"

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