Can Home Retail Group maintain its recovery?

Markets are expecting Argos to lead the recovery of Home Retail Group, as the high street store‘s odd blend of catalogue and internet continues to hit the mark.

Investors will be hoping that Argos can continue its renaissance and drag Home Retail Group higher still when the company releases its latest figures on Thursday 16 January.

The general consensus is that Argos will see a 2.5% increase in sales over the festive period. Last week food retailers broadly underwhelmed traders, with figures that reflected more frugal shopping habits and an increased footfall away from premium-end shopping. This migration is not expected to be replicated in the white goods retailers.

Argos’s division of electrical goods has ensured the company has been well-placed to take advantage of the increased demand for electronic gifts. Argos has historically been the odd one out within the high street stores; however its current mix of catalogue and online offerings has seen this once ridiculed chain rise to the top of the class. Increasingly retailers are referencing click-and-deliver and click-and-collect sales, and Argos’s tie up with eBay has the potential to open up a number of profitable ventures.

Argos will therefore be very much the focus of Home Retail Group on Thursday. A break above the troublesome 200p level could see the share trying to fill the gap to 220p created in the summer of 2011.

Home Retail Group chart

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