ENTERTAINMENT retailer HMV admitted today that it was grappling with "very difficult conditions" as Christmas shoppers failed to add sparkle to sales.

The music and bookshop owner said it expected the high street environment to remain difficult for the rest of the year as it reported group like-for-like sales fell 1.3 per cent during the 12 weeks to December 16.

Chief executive Simon Fox said: "We recognise we face very tough and rapidly changing markets and have to work hard to offset this."

HMV said like-for-like sales at its Waterstone's chain of stores dipped 3.7pc during the period as it was hit by promotional activity in the book market.

Meanwhile, like-for-like sales at HMV shops could only improve by 0.6pc as the value of the UK music market declined 14% in October and November.

It meant the company was forced to admit full-year profits would be at the bottom of expectations. Analysts had forecast a range of between é69 million and é89 million.

Weakest market

The comments from HMV today echo those made by Woolworths earlier this month after it said the entertainment sector had been its weakest market.

HMV insisted actions taken to ramp up company performance were working effectively and pointed to a 200pc improvement in sales online.

It has also enjoyed a boost in market share thanks to a new nationwide price regime, which has seen cuts for DVDs, music and computer games.

The company, which bought Ottakar's book shops in July, also held out hope for a boost from last-minute Christmas shoppers, especially at the weekend.

Mr Fox said: "We are seeing very positive and tangible results from the strategic actions implemented during the course of the year, including strong market share gains in entertainment, rapidly growing online business and the delivery of synergy benefits from the acquisition of Ottakar's."

However, HMV also painted a bleak picture at its operations outside the UK with like-for-like sales down 3.8pc in Asia and 3.4pc in HMV Canada.
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