LONDON (AP) _ HMV Group PLC, a retailer that sells music, DVD, games and books, said Friday that its sales are growing at a much slower pace as consumers begin to halt purchases as the economic climate worsens.

By JANE WARDELL

LONDON (AP) _ HMV Group PLC, a retailer that sells music, DVD, games and books, said Friday that its sales are growing at a much slower pace as consumers begin to halt purchases as the economic climate worsens.

HMV said that same-store sales across its group rose 1.3 percent in the 18 weeks to the end of August, significantly slower than the 10.1 percent growth previously.

The group's book retailing arm, Waterstone's, was the weakest link, posting a 4.3 percent slump in same-store sales, reflecting a weaker book market and tough comparisons with the previous period.

Same-store sales are a key indicator of retail health, comparing sales at stores open at least a year.

HMV shares dropped 2.3 percent after the trading update to 128.75 pence ($2.27).

However, chief executive Simon Fox said that the results were in line with expectations "in a tough consumer environment."

"I remain confident that our strategic initiatives are on track," Fox added in a statement.

The company - which operates 371 HMV stores selling music, DVD and electronic games in five countries, and 320 Waterstone's bookstores, principally in Britain and Ireland - launched a comprehensive review in March 2007.

The three-year review is aimed at saving some 40 million pounds ($70.5 million) by 2010 and at transforming HMV's business as it faces growing pressure from the growth of digital downloading and competition from online retailers and supermarkets.

Part of the plan is to conduct around a third of its sales online, expanding its range of digital products and launching a social networking site for music and film enthusiasts.

In July, it reported that the recovery plan was ahead of schedule as full-year profit increased nearly fivefold, boosted by the sale of its unit in Japan.

The company said Friday that same-store sales growth of 4.3 percent in HMV Britain and Ireland was driven by its push to increase the mix of games and technology, and continued market share gains in all product categories.

HMV International's same-store sales growth of 2.9 percent reflected the rapidly increasing mix of games in HMV Canada - now accounting for more than 10 percent of sales - as well as a further increase in market share across all categories, it added.

With the company approaching its peak selling period ahead of Christmas, Fox said Friday that it was focused on providing "the very best offers from what is shaping up to be a strong lineup across all product categories."

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