Argos sales reinforce ideas on consumer slowdown, board pessimistic

Times Online -- Argos today provided fresh evidence that the consumer slowdown has spread to every corner of the high street as it reported first quarter like-for-like sales had fallen flat and its executives spoke of their increased pessimism for the year ahead.

Shoppers are tightening their purse strings on even the cheapest outlays for their homes, after the failure of the usual spring house moving season. The downturn in sales of Argos homewares will affect profits in the division.

Asked if the group's outlook had changed since the last trading update two months ago, Richard Aston, finance director of Home Retail Group, parent company of Argos, said: "We are still concerned for the consumer outlook. If we are saying anything is different, perhaps we have a more pessimistic outlook view of 2009 than when we did our three-year review at the start of the year."

Home Retail was the worst perfomer in the FTSE 100 this morning as its shares slipped 9.5% per cent to 203p in early trading, wiping £186 million from its market value.

Mr Aston said his change of sentiment, which was "an intuitive feeling", was based on the changing view in the City about the direction for interest rates over the past few weeks.

"I think 2009 will be a little worse. We can't be concise - I think that is a general view. The current view is that we are trading in a difficult environment."