Argos shrugs off takeover 'distraction' to post sales rise

Updated: 

Retailer Argos notched up its best sales performance for two years as it shrugged off poor early spring weather and the "distraction" of its £1.4 billion takeover by Sainsbury's.

Owner Home Retail Group said like-for-like sales at Argos edged 0.1% higher in the 13 weeks to May 28, while total sales rose 2.6% to £868 million, thanks to a surge in online sales.

The group said its digital makeover was bearing fruit as internet sales rose 16% in the quarter - its strongest growth for more than three years - with online sales making up almost half of all revenues.

John Walden, chief executive of Home Retail, said the group's sales rise came against a "challenging backdrop of constrained seasonal product sales due to poor weather, on top of a deflationary pricing environment".

Home Retail has had an eventful past few months, selling off its DIY chain Homebase to Australian conglomerate Wesfarmers for £340 million in February and agreeing a £1.4 billion takeover by Sainsbury's a month later.

The deal is being looked at by the Competition and Markets Authority (CNA), but is expected to go through in the third quarter.

"Given the natural distraction that a transaction such as this can be for our colleagues, on top of the recent sale of Homebase, I am particularly pleased with our performance in the quarter," Mr Walden said.