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Argos and Homebase shopping figures are listing

‘Squeezed middle’ shoppers are not in the market for a new telly

It is increasingly hard to see a bright future for the Home Retail Group (HRG) – the business behind Argos catalogue shops and the Homebase chain.

In a trading update, Argos, which is much the bigger business, reported an 8.6% slide in sales in the last three months. That was a tad better than the previous quarter, but only because the chain gave away 100 basis points of profit margin to get sales. Like Dixons a day earlier, the biggest problem is in persuading “squeezed middle” shoppers who are fearful of losing their jobs that what they really need is a new telly.

Homebase was no better, converting an increase in sales in the first quarter to a bigger decline more recently. Big ticket items are selling particularly badly and the decline would have been much worse but for relatively buoyant sales of fitted bedrooms – the result of rivals going bust.

What does HRG boss Terry Duddy have up his sleeve to offer investors whose shares have fallen from 472p four years ago to 118p now? Well, the stores are being refurbished, and new ranges are being introduced – like children’s clothes, one of the most competitive markets. And the Habitat name – such a crowd-puller it went into administration – will reappear in Homebase in the New Year. Oh, and Christmas is coming. It is not exactly inspiring.

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