Demand for consumer electronics kindles a return to growth for Argos

Argos parent Home Retail Group said the continued improvement in consumer electronics resulted in like-for-like sales growth of 1.4 per cent in the 13 weeks to September 1, following a 0.2 per cent drop in the first quarter.

This was ahead of a company compiled consensus of a 0.6 per cent decline.

However, same-store sales at Home Retail’s Homebase chain continued to fall in the second quarter, by 3.7 per cent, as weather dampened demand for seasonal products, although the figure was better than the 8.3 per cent decline in the previous three-month period.

Homebase is Britain’s second biggest home improvement retailer behind Kingfisher’s B&Q.

Home Retail chief executive Terry Duddy said: “As this stage, we expect to deliver full-year group benchmark profit in line with current market expectations but, as always, the outcome will depend upon trading at Argos in its peak Christmas period.”

Total sales rose one per cent to £867m.

Shares in the group have risen 32 per cent in three months after the firm produced forecast-beating underlying first-quarter sales at Argos in June, although it had said it was too early to call a revival in the company’s fortunes.

Many retailers are under pressure as consumers are squeezed by higher prices, muted wage growth and Government austerity measures designed to cut record national debt.

Argos has been particularly hard hit in the downturn because its mainly low-income customers have suffered most and because it also faces intense competition from supermarket chains, specialists and online retailers such as Amazon.

American John Walden started as Argos’s new managing director in February.

He has been given free rein to examine all options for the business, including closing some of its 746 shops, which analysts have called for.

Mr Walden will update the market in October.