Sun fuels Argos and Homebase sales surge
Warm weather and demand for TVs and 'big ticket' items such as kitchens helped Argos owner Home Retail Group post strong sales figures.
Argos, which has 734 stores, lifted like-for-like sales by 4.9% in the 13 weeks to May 31 after seasonal products such as barbecues sold well alongside games consoles and televisions ahead of the World Cup.
DIY chain Homebase, which is also part of Home Retail, saw sales of fitted kitchens and seasonal plants and power hoses push like-for-like sales up 7.9%.
Former Argos boss John Walden, who is now in charge of the whole group following the recent departure of long-time chief executive Terry Duddy, said: "We have had a good start to the year."
During the period Argos sold more than 32,000 folding camping chairs and over 270,000 bags of children's play sand. Homebase, which has 322 stores, sold more than 93,000 barbecues and enough turf to cover 36 football pitches.
Home Retail has invested heavily in its click and collect service, with the group reporting that Argos internet sales now represent 42% of all trade. Out of this, mobile commerce grew by 56%, accounting for 21% of total Argos sales.
City analysts had expected Argos to turn in like-for-like sales growth of 3.7%, and Homebase to post like-for-like sales of 7.5%.
The group said it expects full-year pre-tax profits to be in line with market forecasts of £129m, compared to the last financial year when it posted a full-year pre-tax profit of £115.1m.
Argos has scaled back the print edition of its catalogue in favour of digital versions, while it is also closing or relocating at least 75 stores over the next five years.
The company believes its estate of 734 Argos stores is a strategic advantage in the digital era because customers will increasingly want local product collection and appreciate face-to-face customer service.
David Alexander, a retail consultant at Conlumino, said Argos's store estate was perhaps its greatest advantage over pure-play internet retailers.