Home Retail Group reported worse-than-expected drop in sales at its catalogue-based Argos stores for the quarter ended May 29th, in a move that dragged shares down by 4.08 per cent or 9.7 pence to 228.3 pence-a-share. Like-for-like sales at Argos slipped 8.1 per cent over the 13-week period, leading to a 5.2 per cent fall in revenue. Total sales slipped 5.2 per cent to settle at £889 million.

Home Retail Group also announced that its Homebase chain suffered a fall of 1.4 per cent in sales over the same period.

Shares in Argos possessor Home Retail Group took off today in the middle of rumor of a possible proposal from supermarket chain, Asda.

Home Retail, which also possesses Homebase, bounced more than 5% after it was acknowledged as a potential target in Asda's development plans.

The superstore, which is owned by US food giant Wal-Mart, is apparently considering a great acquirement as it looks to seal the gap between opponent Tesco and improve its share of the universal commodities market.