Home Retail Group struggled hugely during the recession, with sales dropping consistently at both its Argos and Homebase stores as consumers battled to save money. However, a combination of the economic recovery and the warmer weather has seen the group rebound impressively, with quarterly like for like sales rising at both of its subsidiary chains.
At Argos, the 13 weeks to the 31st of May saw like for like sales rise by 4.9 per cent from the previous quarter, with the launch of the Playstation 4 and Xbox One contributing to a large uplift in sales of electronics. Seasonal items also proved popular, with many consumers taking the opportunity to purchase big ticket items thanks to the continued strengthening of the housing market.
Homebase, meanwhile, outperformed Argos, with quarterly like for like sales climbing by an impressive 7.9 per cent. Again, the warmer weather and uptick in the housing market played a role due to consumers purchasing seasonal and DIY items, with barbecues in demand across all regions of the country.
Chief executive of Home Retail Group, John Walden, praised both brands for their performance but refused to be complacent about the challenges ahead.
He said; “We have had a good start to the year, with both Argos and Homebase delivering positive like for like sales growth.
“We are pleased with this encouraging start to the year, but remain mindful that we will annualise more challenging comparators in both businesses through the remainder of the year, including Homebase’s very strong seasonal performance in the second quarter of last year.
“At this early stage of the financial year, we expect to deliver full year group benchmark profit in line with current market expectations.”
At present, both stores are continuing to strive towards an improved consumer experience, with revamps playing a huge part in this transformation to a multi-channel leader. Argos is currently in the midst of a modernisation plan affecting all of its 734 UK shops with click and collect collection points and iPads being installed in stores as a means of providing an alternative to the traditional catalogue and customer waiting zone format.
Yet although the plan is still in its early stages, Argos has already begun to reap the benefits of its transformation. During the first quarter, online sales rose significantly “in line with total company sales” and now represent around 42 per cent of total sales generated by the retailer.
Mobile sales, meanwhile, grew by 56 per cent as Argos continues to invest in its app for tablets and smartphones.
With non-food sales rising throughout the retail industry and many retailers in a far better position than at the same time last year, the impetus will now be upon maintaining and growing sales year on year. However, with good weather predicted for this summer it seems that Home Retail Group is well placed to capitalise on the upturn in consumer confidence these factors bring.
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