Homebase struggles as shoppers dry up

How do you run a consumer-facing business in the teeth of a recession? With great difficulty, says Home Retail Group boss Terry Duddy.

The man who runs the Argos and Homebase outfit says Alistair Darling's tax increases aren't helping either. "When you have the Government and the IMF disagreeing on what is going to happen to the country, it is very difficult for us to make plans for how we should run the business," he said.

Home Retail today outlined full-year results mostly in line with City forecasts — operating profit down 25% to £300 million, but the final dividend held firm at 14.7p.

Previously announced goodwill write-offs of £694 million lead to an accounting loss of £402 million and sales for the year to the end of February are down 4.8% at Argos and 10.2% at Homebase — showing that shoppers pulled away from non-essential spending in the past 12 months.

Duddy warned: "It is going to be a difficult 2009. We are in a particularly difficult trading environment."