Argos has fired an early warning shot ahead of this year's Black Friday – which is expected to see shoppers splurge more than £1 billion on pre-Christmas bargains.

Last year's shopping frenzy at the end of November made headlines with consumers scrambling to snap up goods that had their prices cut.

Police were even called out to deal with scuffles at supermarkets in Glasgow and Dundee.

The chain's owners, Home Retail Group, saw its shares plunge as much as 18%, reaching their lowest level for two-and-a-half years as it said full-year profits would be hit and raised concerns over an unpredictable festive season caused by the Black Friday discount shopping day.

Costs of Argos's new same-day delivery service will also take their toll on annual profits after contributing to a near halving in interim earnings at the high street chain.

The warning comes amid predictions for spending to surge by a third to more than £1 billion on Black Friday, falling on November 27 this year - a one-day shopping bonanza, which first became popular in the United States.

The figures from Experian and online retail association IMRG said this would mark the first time that UK online sales reach the £1 billion milestone in a single day.

John Walden, chief executive of Home Retail, said: "Trading at Argos during this year's important Christmas season seems less predictable than usual, as both retailers and customers determine whether to repeat last year's unusual Black Friday patterns."

Argos was hit last Christmas by volatile trading after high demand for Black Friday promotions skewed its performance, leaving sales flat over the crucial season.

John Lewis managing director Andy Street voiced concerns over Black Friday earlier this year, saying it hit profitability and caused havoc on the high street, although the partnership confirmed last week it "has no choice" but to take part in the promotional event again.

Half-year figures from Home Retail showed operating profits at Argos dropped 47% to £6.4 million in the six months to August 29, with like-for-like sales down 3.4%.

Home Retail's DIY business Homebase enjoyed a better start to the year, with earnings up 23% to £34.3 million after decent summer sales and cost savings.

This helped group underlying pre-tax profits rise 10% to £34.1 million in the first half, but Mr Walden said the overall performance was "mixed".

Home Retail hopes for a pick-up in sales at Argos over the second half, but cautioned the "challenging" trading, costs of its Fast Track delivery service and an unpredictable Christmas were likely to see annual profits fall "slightly" short of City expectations.

The market was pencilling in group profits of £115 million to £140 million, against £132.1 million the previous year.

Home Retail also became the latest retailer to confirm the expected cost of the incoming national living wage, revealing a £15 million impact in the next financial year.

It hopes to offset this through moves to improve cost efficiency across the group.

Jasper Lawler, CMC market analyst, said Home Retail's steep shares fall signalled investor anxiety over what is a key trading season for the group.

He said: "The extent of the sell-off is not just a reaction to the profit warning, but the timing of it.

"The profit warning demonstrates a clear lack of confidence in the strategy for Argos and Homebase over 'Black Friday'."

Freddie George, retail expert at Cantor Fitzgerald, slashed his full-year profit forecast for Home Retail to £118 million.

He recently said the group had "reached rock bottom", adding there was potential for Homebase to be sold off.

Argos suffered over the summer due to poor demand for TVs, tablets and white goods, such as fridges and washing machines, although toy sales were strong.

It is in the middle of a major revamp to turn itself into a cutting-edge digital retailer, recently stepping up its advance against the likes of Amazon with the launch of a same-day delivery service in the UK.

Its Fast Track service will be available in four time slots throughout the day until 10pm, for a flat fee of £3.95.

The retailer also added around 3,000 products to its range, while improving its own brand range, such as Chad Valley and Bush.

And it opened another raft of concessions within Homebase and Sainsbury's under a deal with the supermarket.

But the transformation does not come without its costs and the opening of another 93 stores and concessions, as well as recruitment of vehicles and drivers for its new delivery service, sent operation costs up by £14 million in the first half.

Overall trading was buoyed by Homebase as like-for-like sales across the group lifted by 5.6% over the half-year, with so-called big ticket kitchen, bathroom and furniture items proving popular.

But trading in Homebase was also partly driven by stock clearance sales as it closed 25 stores.

Last October, the group embarked on a three-year plan to close about 80, or a quarter of its 323 stores, after it said consumers had ''fallen out of love with DIY''.

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