HOME Retail, Britain's biggest household goods retailer, said sales at its main Argos business fell at a slower rate in its first quarter, while sales at its Homebase home improvement business were severely dented by wet weather.
The firm said on Tuesday trading had been volatile over the period but it was currently comfortable with market expectations for full-year underlying pretax profit.
"We will continue to plan cautiously," said chief executive Terry Duddy.
The firm said sales at Argos stores open over a year fell 0.2 percent in the 13 weeks to June 2.
That compares to a fall of 8.5 percent in the previous quarter and exceeded analysts' consensus forecast of a 4 percent decline, according to a company poll of 15.
Many British retailers are under pressure as consumers are squeezed by higher prices, muted wage growth and government austerity measures designed to cut record national debt.
Argos has been particularly hard hit because its mainly low-income customers have suffered most and because it also faces intense competition from supermarket chains, specialists and internet players like Amazon.
At Homebase, Britain's No.2 do-it-yourself retailer behind Kingfisher's B&Q, like-for-like sales fell 8.3 percent, broadly in line with analysts' expectations but worse than a fourth quarter fall of 6.5 percent.
Gross margin was down 25 basis points at Argos and up 225 basis points at Homebase.
Home Retail shares, which have lost over half their value over the last year, closed Monday at 70 pence, valuing the business at 568 million pounds ($890 million).