Music and books retailer HMV yesterday reported a sharp dip in summer sales after warning investors there were few signs of an upturn on the high street.
Problems were most severe at its HMV stores, where like-for-like sales in the UK fell 11.5 per cent in the three months to Saturday - nearly three times as fast as the decline over the previous eight weeks.
The company said competition in the book market was continuing to intensify after it revealed that sales at bookstore chain Waterstone's had fallen eight per cent over the past three months, compared with 2.8 per cent in the eight weeks since the start of May.
Chairman David Kappler said: "Conditions for high street retailing in the UK have been tough during our financial year to date, and there are few signs of an improvement."
The bomb blasts in London in July had sapped consumer confidence when it was already at a low ebb, deterring many shoppers from travelling to the capital and major city centres, HMV said.
But the retailer indicated that the impact of the worsening UK picture on profits would be cushioned by the removal of up to three per cent of costs, better margins at Waterstone's and like-forlike sales growth at its international businesses.
The retailer insisted that it was well-positioned for the key Christmas season, which will see the launch of new albums by Robbie Williams and rockers Franz Ferdinand and books from Zadie Smith and TV chef Jamie Oliver.
HMV is currently winning a takeover battle for Ottakar's after having a £ 96 . 4 million offer accepted by independent directors of the rival book chain.
But its trading statement revealed that the fortunes of its estate of more than 190 Waterstone's stores was heading in different directions to its takeover target.
Despite deteriorating conditions on the high street, Ottakar's said last week that like-for-like sales were only 3.8 per cent lower in the seven weeks since the end of July.
Waterstone's sales are 6.4 per cent worse off in the financial year so far, but its owner insisted that gross margins were up despite having to offer discount deals on Harry Potter And The Half-Blood Prince to compete with supermarkets and online retailers.
Margins were steady at its estate of more than 400 HMV music stores in the United Kingdom and Ireland, despite the likefor-like decline in sales of 9.2 per cent since the start of May, HMV said.
It was pressing ahead with its expansion programme, with 15 new HMV branches already opened, including one at upmarket department store Harrods in London, and at least ten due to begin trading over the remainder of the financial year.