Home Retail Group said sales at DIY chain Homebase have declined 0.7 per cent to £217 million in the eight weeks to March 1st in a "difficult" trading environment.
In a trading statement, the group said most product categories were down, although kitchens continued to see strong growth.
A new store opening and two relocations over the period helped to stem the total sales decline. Like-for-like sales - a measure of growth from existing stores - were down 5.3 per cent over the period.
Over the second half of the year, sales were down three per cent to £715 million, as a slowing housing market and tighter household budgets took their toll.
Sales at Home Retail's other brand, Argos, were more encouraging. Total sales grew 5.4 per cent to £566 million in the eight weeks to March 1st 2008, helped by seven store openings, while like-for-likes increased 1.9 per cent.
A key growth driver was video games, while a strong January sale and the earlier timing of Mother's Day also contributed to growth.
The sale and an "adverse" product mix shaved 50 basis points off the group's profit margin, however.
Like-for-like sales over the first half were essentially flat at 0.3 per cent.
Home Retail Group will announce its full-year results on Wednesday 30th April 2008.
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