Ahead of its takeover deal with Sainsbury’s, Home Retail Group released sales results for the 13 weeks to May 28 this week, revealing good sales growth for Argos.
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The group said its digital revamp is now bearing fruit, with internet sales rising 16 per cent in the quarter – the strongest growth for more than three years and online now accounting for nearly half of all revenues. “Food price deflation continues to impact our sales and pressures on pricing mean the market will remain competitive for the foreseeable future”, said Chief Executive Mike Coupe.
If and when the Competition and Markets Authority (CMA) approves the £1.4bn takeover deal between Sainsbury’s and Argos, Mr Walden said determining which party is responsible for paying compensation to customers – Sainsbury’s or Home Retail – would “depend on the scale” of the problem.
Argos owner Home Retail Group says it is setting aside at least £30 million to compensate store card customers after overcharging late payment fees.
Argos introduced Fast Track last autumn offering 20,000 products for immediate store collection or same-day home delivery, and Walden said this was starting to pay off.
“Argos delivered good total sales growth together with positive like-for-like growth, representing its strongest sales growth performance in eight quarters”.
Walden said he was pleased with first quarter trading, in a “challenging” and deflationary retail environment.
“But for each customer it matters”.
The group had already put by £17 million in full-year results to the end of February to cover charges, including the store card payment errors and redress for mis-selling of payment protection insurance.
Argos will now write to affected customers telling them of the mistake. “We will address it and treat customers fairly”.
The fall marks a setback after a return to quarterly like-for-like growth for the first time in more than two years the previous three months, when sales edged 0.1% higher.
While he admitted the decline in first-quarter sales was a “slight step back”, Coupe said the chain would stick to its strategy and continue to lower everyday prices.
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The growth in sales of non-electrical products was largely driven by furniture and general sports, partially offset by weaker sales of seasonal products.
