GUS gloomy over retail sales
Retail conglomerate GUS, which owns Argos and Homebase, yesterday predicted the retail sectors it serves would remain in negative like-for-like sales territory until at least September 2006.
“We are planning on the assumption that like-for-like sales will remain in decline for the market as a whole for the next 12 months,” said finance director David Tyler.
However despite the gloomy overview Tyler said its retail chains would continue to outperform. Tyler said the non food, non-clothing market shrank by 4 per cent over the half with both Argos and Homebase taking market share despite reporting falling like-for-like sales.
Tyler said it anticipated another tough Christmas but that catalogue business Argos was well prepared with “very good prices and sensible promotions”.
Argos reported a like-for-like sales fall of 3 per cent in the first half as sales of white goods, toys and chav favourite Elizabeth Duke jewellery softened.
There was price deflation of 5 per cent across the retailer’s 17,000 plus lines.
“If a young fellow is a bit short of cash he will use it to put petrol in his car rather than go and buy a little bit of jewellery for his girlfriend,” explained Tyler.
Sales at home improvement chain Homebase were down 4 per cent on a like-for-like basis.
The strong performance of kitchens and furniture categories implied market share gains from both B&Q and basket case MFI.
However Tyler conceded that the addition of mezzanine floors in 19 stores flattered the retailer’s performance. The credit checking arm Experian was the star performer, achieving record first half sales growth of 37 per cent.