The owner of Argos and DIY chain Homebase announced heavy sales falls for both businesses today.
Home Retail Group said Argos like-for-like sales were 7.5% lower in the third quarter of its financial year, covering the 18 weeks to January 3. And Homebase same-store sales dived 10.2%.
The company described the trading environment as turbulent, but said cost savings meant it remained on track for annual profits of around £320m (€355m).
Chief executive Terry Duddy said: ``Our markets continue to be significantly impacted by the sharp reduction in consumer spending.''
Margins in both businesses were lower in the period as a result of increased promotional activity and seasonal stock clearances.
At Argos, consumer electronics and video gaming in particular did well over the period, but traditional gift areas of toys and jewellery were marginally weaker than the company average.
And the house market slump meant furniture and homewares were the most challenging categories for the chain, which operates 725 stores.
Total sales for the business were £1.85bn (€2.05bn), a fall of 3.6% when the impact of new store space is stripped out.
Homebase’s total sales were £479m (€532m), a fall of 3.8% after two openings and one closure during the period took its portfolio to 346 stores.
The figures were helped by positive sales growth in kitchens, but other ’big ticket’ areas were amongst the weakest performing categories.
With two months remaining of its financial year, Home Retail said it expected profits to be in line with current market forecasts.
Mr Duddy added: “As previously indicated, we expect the trading environment for the next financial year to be extremely challenging, but the group remains strongly positioned to extend its competitive advantage.”