Argos has suffered a slump in sales, blaming weak demand for electronics.
For the eight weeks running up to 25 February, sales fell 7.7 per cent to £480m.
During this time the company said there was reduced demand for TVs and a 35 per cent slump in video games sales as lower-income customers cut back on electronics purchases. It also came under pressure from rivals: grocers, specialists, and the internet -- where prices are being slashed. During the year it opened one new store but closed 12. Internet sales now account for 40 per cent of revenue.
Analysts have questioned whether new Argos boss John Walden will need to instigate major store closures to reduce outgoings.
However, the owner of Home Retail Group, which owns both Argos and Homebase, said on Thursday there were reasons to be optimistic in the coming year, with the Olympic Games and the Queen's diamond jubilee likely to help increase spending. He also said a fall in inflation would boost profits. However, he said that overall profits would be likely to fall as like-for-like sales continue to come under pressure.