Argos sales dipped 5.3 per cent according to its latest trading update.
Sales at stores open at least a year fell by 7.5 percent in the 18 weeks to January 3rd, compared with a 5.3 per cent decline in the 44 weeks to that date.
Annual pretax profit will be around the consensus analyst estimate of £320m ($468 million).
"Our markets continue to be significantly impacted by the sharp reduction in consumer spending," said Chief Executive Officer Terry Duddy in a statement.
Increased discounts and stock clearance put additional pressure on gross margins, though cost control helped the company deliver a “robust financial performance,” he added.