Retailers are latest to feel wrath of markets as sales slide

Carphone sheds 11% on broadband worries w Home Retail Group hit by Homebase sales fall

The value of Carphone Warehouse and Home Retail Group plunged yesterday, as the focus of a volatile stock market turned on the retail sector. Shares in both companies fell sharply, as investors seized upon the most disappointing aspects of their respective trading updates.

Despite posting strong profits growth for the year to 29 March, shares in Carphone fell by more than 11 per cent after the mobile phone retailer said that sales had slowed at itsfixed-line broadband business since then.

Similarly, while Home Retail Group said its Argos business had performed reasonably well over the 12 weeks to the end of May, investors seized on a 12 per cent fall in sales at its Homebase operation. The shares fell by almost 4 per cent.

The comments of both retail groups will fuel the growing consensus that the consumer spending slowdown is spreading to all areas of the high street and is set to deteriorate further.

Carphone Warehouse's shares tumbled by 25.75p to 202p, while Home Retail Group's shares fell by 8p to 215.75p.

Carphone's chief executive, Charles Dunstone, warned that he expected slower growth from the company's fixed-line broadband business this year, as it posted pre-tax profits up 75 per cent to £216m and total sales up 12 per cent to £4.47bn for the 52 weeks to 29 March.

Carphone said it has added a lower-than-expected number of customers to its fixed-line broadband business since 29 March. It attributed this partly to the slowdown in the housing market, as people often switch providers when they move house, and increasing sales of mobile broadband packages. Mr Dunstone said: "If these trends continue, we expect lower revenue growth this year than previously indicated, compensated by improved margins."

Carphone Warehouse posted like-for-like retail sales up by 2.8 per cent for the year to 29 March. Mobile phone connections were up 15 per cent, but Mr Dunstone warned: "Everyone I talk to in the retail world is so gloomy and worried – you have to take a cautious view on the outlook on the rest of the year."

Home Retail Group's chief executive, Terry Duddy, attributed the DIY chain Homebase's tumbling like-for-like sales to "extremely weak" sales of seasonal-related products, such as garden furniture and barbecue equipment, during the poor weather in March and April, which contrasted with better weather over the same period last year. Seasonal-related categories, which account for about 40 per cent of first-quarter sales, tumbled by 20 per cent on a like-for-like basis.

Argos posted total sales up 4 per cent to £929m and flat like-for-likes. "The Argos performance is pretty resilient compared to a decline in the overall non-food market," said Mr Duddy. The catalogue retailer was boosted by robust sales of consumer electronics products, mobile phones and video game hardware, such as the Nintendo Wii and Playstation 3, and software such as Grand Theft Auto. However, furniture and homewares sales growth had slowed.

Meanwhile, Carphone Warehouse provided an update on its burgeoning partnership with the US electricals giant Best Buy. Mr Dunstone said the retailer was in more than 600 Best Buy stores in the US, and it would accelerate the roll-out. Last month the US company bought a 50 per cent stake in Carphone's retail arm for £1.1bn.

Mr Dunstone was also bullish about the launch of Apple's 3GiPhone in the UK and Ireland in July. "We are very enthusiastic the pricing that Apple and O2 are bringing to the market place makes it very comparable to other products," he said. "It is an absolutely superb phone and our exclusivity in terms of distribution gives us a clear advantage."

News
people
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
people'I hated him during those times'
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
Dame Vivienne Westwood has been raging pretty much all of her life
peopleMemoir extracts show iconic designer 'felt pressured' into going out with Sex Pistols manager
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
fashionAlexander Furyon London Fashion Week Spring/Summer 2015
Arts and Entertainment
Lauryn Hill performing at the O2 Brixton Academy last night
musicSinger was more than 90 minutes late on stage in Brixton show
News
i100
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
News
people''Women's rights is too often synonymous with man-hating'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam