The World Cup has not managed to stoke requirement for new Television sets
The World Cup has not managed to stoke requirement for new television sets with Argos today reporting slumping sales before the tournament’s kick-off tomorrow. The increase to the last World Cup in Germany saw homebody fans splurge on flat-screen Televisions , with sales double that of the year before. Terry Duddy, Boss of Home Retail Group, which owns Argos, said this time it had been a moist squib : “There has been nothing like the same demand we saw before the 2006 competition. ” Like-for-like sales at Argos dropped 8.1% in the thirteen weeks to twenty-nine May. Margins were also influenced as it cut costs to win custom while juggling higher freight costs and a puny pound. 4 years back Duddy described an “unimaginable ” market for electronics as a sun-soaked World Cup coincided with the change from “giant box ” cathode ray sets to graceful flat panel digital Televisions . “We had amazing sales in that period it is a perfect typhoon for us apropos Television and barbecues, ” he announced. The disheartening figures weighed heavily on the shares which were the second-biggest faller in the FTSE a hundred after BP, closing down 4% at 228p. Researchers took out their red pens after the company, which also owns Homebase, stated that it was hoping to match, rather than better, last year’s profits of £293m. Argos said computer games and console sales were especially puny down thirty percent lacking the presence of a new contraption to excite customers. Lower gaming and TV sales accounted for approximately two thirds of the final decline. But Duddy admitted some of the discomfort was self-inflicted as it lost share in both areas in the period. In Apr Home Retail Group voiced £70m plans to modernize the catalog chain, in the face of an onslaught from superstore groups Asda and Tesco. Argos’s fortunes contrast with those of Middle England’s fave store, John Lewis, that has reported a powerful run in its technology aisles with weekly sales up 19% at last count.
Argos remains the largest seller of Televisions in the United Kingdom and Duddy expounded the quarter was set against a really robust performance last year when rival DSG was fighting for survival. Duddy declared information on the UK Television market for the 1st 4 months of the year showed sales were below last year’s levels when the country was still trapped in recession and the jury was out as to if the world cup would be sufficient to elbow it into expansion. Investec researcher David Jeary described the retailer’s performance as a “curate’s egg, good in parts, less so in others”. Homebase fared better than its bigger stablemate, with like-for-like sales down 1.4% as requirement for garden furniture and BBQs lessened a drop in sales of plants and gardener’s tools among cool spring weather. Last week sector leader BQ announced underlying sales slipped 2.8% in the thirteen weeks to one May. Duddy declared Homebase attracted more wealthy buyers who had profited from enormous falls in mortgage rates.
On Argos he added : “Mass-market purchasers have been having a heavier time, and feeling the heat a little more. ” To make up for the sales shortfall at Argos, the retailer has started on a cost-cutting program built to save £20m. Last year Home Retail cut the hours worked by Argos’s generally part-time staff to save cash and is predicted to use the strategy again. “we’ve got some catching up to do at Argos but Homebase is before the game, ” claimed Duddy. Researchers are concerned that plans to chop public sector roles and lift VAT will pile the stress on Argos’s low-income purchasers. “Argos is very exposed to the mass market consumer, ” related JP Morgan Cazenove’s Gillian Hilditch. Halfords rides high Bikes and auto parts chain Halfords has made record profits of £117m, up 27%, regardless of the recession and confirmed it is looking for more acquisitions. Halfords has been turbo-charged by robust sales of cycles and cycling accessories up 15% on the year before. The retailer now accounts for over 35 percent of the United Kingdom bike market.
Like-for-like sales of auto upkeep products 30 percent of Halfords’ total sales climbed 8%, turbo-charged by additional demand due to the winter weather. Halfords has just lately expanded into vehicle servicing and MOTs, purchasing the 224-site Countrywide Autocentres business for £72m. Manager David Wild said that he was still looking out for other deals and was monitoring about twelve possible targets.
Wild stated that he was also braced for a rise in VAT : “It is unavoidable. We need to grasp when and how much.
We have already ordered additional printing ink so we can print out all of the new shelf-edge labels. We’ll have ten thousand costs to switch in 450 stores.