Argos Hints at Higher Prices Due to Profits Slump
Wednesday, April 29, 2009 16:19
Home Retail Group, which owns Homebase and Argos, has admited that the group ‘cannot be immune’ from the economic downturn. It has confirmed the slowdown in consumer spending with annual profits down of 25% on a year ago.
The group said it expected prices will rise in the future because retailers pass on the cost impact of a weak pound. Homebase and Argos have both suffered in the downturn as households cut their spending and the stagnation in the property market weighs on retailers. The total consumer spending in the £60bn home and general merchandise market ‘declined marginally‘ in 2009. Homebase saw its like-for-like sales dropped by 10.2%, while Argos fell by 4.8%. It is warned that while the business model of Argos made it relatively easy to cut expenditure, Homebase would pose a ‘more significant challenge’.
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