Argos saw its sales slide by 8.8% on the back of a weak consumer electronics market, in results released on Thursday.
The company's owners, Home Retail Group, said that sales in the 18 weeks to December 31 were weak, with the demand for video gaming and audio products particularly low.
The company has struggled to remain competitive in the consumer electronics market, and reported only a marginal profit in the half-year to August.
Internet business was a rare bright spot, rising to account for 40% of total sales, with "click and collect" and mobile commerce driving its growth.
Home Retail Group's, other major chain, Homebase, saw like-for-like sales fall by 2.6%, with purchases of larger items falling foul of weak consumer sentiment.
Terry Duddy, the company's CEO, called the trading environment "volatile and demanding" and said:
"We will continue to plan cautiously with an ongoing focus on managing robustly both the cost base and the cash position of the Group while prioritising our investment in the ongoing development of our multi-channel capabilities."
The company is closing a number of stores as it looks to cut costs, and as a result it may meet profit targets of £100m, but it is likely to cut its dividend to shareholders. Home Retail Group's shares fell 4% after the announcement.
Home Retail Group's numbers cap a bad morning for retail, which also saw Tesco, the UK's biggest grocer, issue a profit warning that sent shares spiralling.