Like-for-like sales held flat at Homebase for the first half of 2011, but slumped 9.1% at sister chain Argos.


According to a second quarter trading statement from parent company Home Retail Group (HRG), like-for-like sales at Argos declined by 8.6% to £859m for the 13 weeks to August 27, equating to a 9.1% decline to £1,676m for the first half.

The picture was more positive at Homebase, where like-for-likes were down 3.1% to £382m for Q2, driven by a weaker performance in seasonal sales, but down just 0.6% to £840m for the first half of the year.

Big-ticket sales continued to struggle at Homebase, said HRG, although fitted bedroom furniture continued to perform well, benefiting from the rollout of the retailer's installation service and instore displays. Bathrooms also performed well.

Gross margin was down approximately 25bps for the first half after remaining flat in Q2.

Home Retail blamed the weak consumer electronics market for the majority of the declines at Argos, where gross margin also fell by approximately 100bps. This was mainly driven by adverse currency and shipping rates, as well as an increased level of clearance activity.

HRG chief executive Terry Duddy commented: "Overall the performance in the quarter was in line with our expectations. Argos' sales continued to be impacted by the decline in the consumer electronics market, while at Homebase, after a good first quarter which saw strong seasonal sales, the second quarter was more challenging.

"Whilst continuing to plan cautiously, we are in good operational shape as we approach the Christmas trading period. We continue to develop and invest in our customer proposition across the businesses."

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