Member Article

Argos miss the mark despite Black Friday push

Retailer Argos has said that although it experienced ‘strong trade’ on Black Friday, profits have been affecting by the high volume nature of the event.

The retailer, which is owned by Home Retail Group, reported an increase in like-for-like sales of 0.1% for the 18 week period ending 3rd January.

Argos opened its first store in Canterbury in 1973 and was acquired by GUS plc in 1998, subsequently becoming a part of Home Retail Group plc.

Black Friday represented Argos’ highest sales week for the period, but it says sales were particularly ‘volatile’ in the weeks surrounding the event.

Internet sales for the period represented almost half of total Argos sales at 49%, up from 46% for the same period last year.

Within this, mobile commerce sales grew by 40% to represent 28% of total Argos sales, up from 20% in the prior year. Sales via Check & Reserve represented 80% of internet sales in the period.

Since the trading statement this morning, Home Retail Group’s shares have dropped 6%.

John Walden, chief executive of Home Retail Group, said: “I am pleased with our overall performance during our important peak trading period, having managed through a volatile trading environment with good control of both gross margin and costs.

“This year’s adoption of ‘Black Friday’ promotional events generally by the UK market significantly impacted the shape of Argos’ sales over its peak trading period.

“For example, on the day alone sales at Argos were up by 45%, while at the same time, it received over 13.5 million visitors to its digital channels, three times last year’s visitors, with mobile channels representing 71% of visits and 61% of digital sales.

“The draw of discounts affected trade both before and after that busy weekend as consumers satisfied their Christmas shopping lists with bargains.

“As a result of our trading strategy in the period, we continue to expect Group benchmark profit before tax for the current FY15 financial year to be in line with the current market consensus.”

This was posted in Bdaily's Members' News section by Ellen Forster .