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Homebase and Comet signal revival

James Thompson
Friday 11 September 2009 00:00 BST
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Upbeat news on sales of big-ticket items from three of the UK's biggest retailers yesterday supports recent data that consumer spending and the housing market are close to recovery.

Home Retail Group, which owns Homebase and Argos, Kesa Electricals, owner of the Comet electricals chain, and the floor covering specialist Carpetright delivered statements suggesting the worst of the recession might be drawing to a close.

Comet, Britain's second-biggest electricals retailer, posted marginal like-for-like sales growth of 0.3 per cent, citing an improvement in sales of white goods in its product mix. A source close to Kesa, the pan-European electricals group, cited Comet's improved performance in sales of "big drum" washing machines and the more expensive "black fridges".

Sales of white goods are a key barometer of the housing market, which has this year enjoyed several months of rising sales, and consumer confidence.

Lord Harris, chairman of Carpetright, told the group's annual meeting that after an "extremely challenging year" he was more confident about "the continued improvement in UK trading conditions."

Similarly, Terry Duddy, chief executive of Home Retail, said Homebase's kitchen sales were a driver behind a 2.8 per cent rise in like-for-like sales in the 26 weeks to 29 August, which was better than it expected. At Argos, underlying sales were down 2.1 per cent over the six months, but robust sales of TVs and personal computers offset a sluggish performance in video games.

Mr Duddy criticised the "mad timing" of the rise in VAT back to 17.5 per cent on 1 January, at the busiest time of the year for the sector, and remained cautious on the outlook for 2010. "People will be concerned about taxation, unemployment and [the plans of] a new government," he said.

Home Retail predicted that second-half profits would be "broadly in line" with last year's £121m after a strong focus on cash margins.

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