Britain's leading household goods retailer Home Retail, posted a 70 percent slump in first-half profit, with profitability at its Argos business collapsing as its cash-strapped shoppers felt the pain of the economic downturn.
UK-ARGOS - A day after Britain reported record inflation of 5.3 percent - its biggest household retailer Argos posted a slump in profits OF 70 percent.
The news pushed shares in its parent company Home Retail down more than 10 percent.
In the first half of last year Argos made profits of 54.4 million, this year its profitability for the same period crashed to 3.4 million pounds - further evidence of the pain felt by British shoppers.
Soaring energy costs, zero wage increases and rising unemployment are taking their toll.
The group's do-it-yourself chain, Homebase also suffered a slump as shoppers cut back on electrical goods.
Argos which sells everything from jewellery to washing machines is Britain's biggest household goods retailer but its now facing strong competition from supermarkets and internet shopping sites.
Home Retail is under pressure to scaledown Argos's more than 750 stores and reshape its catalogue business.
However the firm say its sticking with its strategy.
Argos hopes ot launch a joint venture in China sometime next year.
Hayley Platt, Reuters