Drop in television sales impacts on Argos revenues

Argos ad: TV and video game sales down
Argos ad: TV and video game sales down

Argos, the high street and catalogue retailer, has posted a sharp 8.1% drop in sales and revealed that television sales are down ahead of the World Cup in South Africa.

During the 13 weeks to 29 May this year, Argos also recorded a 5.2% loss in revenues.
The company said that consumers had been reluctant to spend at previous levels due to economic uncertainty.

The retailer's sales in both the video gaming market and television sales accounted for approximately two-thirds of the total decline in sales.

The results come in the face of increased competition from supermarkets chains such as Tesco and Sainsbury's as they move further into the electronic goods market.

Argos said that growth from the internet remained strong, led by its Check & Reserve service. The internet represented 32% of Argos' sales, up from 28% a year earlier.

The Argos application for Apple's iPhone and Touch devices launched late last month and achieved 250,000 downloads in the first week.

Matt Siner, senior retail analyst at Verdict Research, said: "With a significant proportion of its shoppers using Asda and Tesco for food shopping, the roll-out of Argos-style, non-food kiosks by these two retailers is beginning to impact on Argos' sales.

"In addition, Sainsbury's is now selling more non-food in stores and through its website.

"One major sign that Argos is losing out to its rivals is that, with the World Cup about to start, its TV sales were down on last year. Argos has failed to excite customers in an environment where the grocers and big electrical specialists have been offering attractive and innovative promotions."

Terry Duddy, chief executive Argos' parent company Home Retail Group, said: "Economic conditions remain both challenging and uncertain, with this quarter proving difficult in terms of consumers' willingness to spend.

"The comparable period last year also contained some strong sales growth and share gains in certain product categories, particularly in consumer electronics at Argos.

"We continue to drive cash gross margin, further cost efficiencies and our increased investment plans. At this early stage of the financial year, we are targeting to achieve a similar level of profitability to last year."

Earlier this month Argos created some FIFA World Cup ambush activity, by allowing consumers to create personalised invites to house parties around tournament matches.

The activity, created by Meteorite, enables users to create personalised invites online around a specific game, through email and Facebook. It will be supported with online activity and targeted emails to Argos customers.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer
Mumsnet admits users' emails and passwords accessed via Heartbleed bug