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Last Updated: Thursday, 17 January 2008, 07:59 GMT
Argos owner predicts tough trade
Homebase store
Consumers are tightening their spending
Home Retail Group (HRG), the owner of Argos, has said that the slowdown in consumer spending is now "more evident" in its latest trading update.

HRG said that short-term sales growth would be harder to attain, although the firm added that full-year profits were set to be at the top end of forecasts.

Argos saw like-for-like sales fall 0.2% in the 18 weeks to 5 January, and DIY firm Homebase saw a 6.3% decline.

Several retailers have been hard hit as consumers rein in their spending.

'More difficult'

Argos said its more traditional gift areas of toys and jewellery, as well as furniture and homeware suffered during the period.

But to counter this, there was "exceptional performance" in the video gaming, satellite navigation and mobile phone sectors.

Internet sales also helped to boost sales, with orders increasing by a third over the period.

At Homebase, sales of bathrooms slowed and furniture sales became "more difficult" but there was continued growth in kitchen sales.

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