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How Argos is prioritising convenience and value


Argos, part of the Sainsbury’s group since 2016, operates across channels, selling both in freestanding shops and digital format stores inside branches of Sainsbury’s. Today, the retailer says that its website sees more than one billion visits a year and 73% of its sales start online.

By the end of its latest full year, in March 2023, it had 285 standalone stores, following 45 store closures during the year, and 424 stores within branches of Sainsbury’s following 24 openings and 420 collection points.

In its latest financial year, Argos made more sales through branches within supermarkets than through its standalone Argos stores for the first time.

The retailer, which pioneered click and collect in 2,000, today uses 17 local fulfilment centres and its delivery fleet to offer fast delivery and collection services. J Sainsbury plc results for the year to 4 March 2023 show Argos sales falling by 2.9% but gaining market share in a declining general merchandise market.

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Sainsbury’s group revenues, excluding VAT but including fuel, rose by 5.3% to £31.5 billion, while its group retail sales grew by 2% to £28.7 billion, including VAT but excluding fuel. Pre-tax profits fell 62% to
£327 million from £854 million a year earlier.

Sainsbury’s says its strategy for the retailer is to improve Argos’ profitability and competitiveness, and that it has succeeded in outperforming the general merchandise market by focusing on value, convenience and availability.

Simon Roberts, chief executive of J Sainsbury plc, said in its full-year results statement: “We get how tough life is for so many households right now, which is why we are determined to battle inflation for our customers.

“Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years. As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury’s and Argos.”

At Argos, the focus on convenience is reflected in delivery and collection that can be as fast as same-day, a wide range of payment options, and returns options that include taking back to a store or collection point or returning by post, for up to 30 days after buying.

The retail group has responded to inflation by increasing hourly paid staff wages three times in the past year, by a total of 10%. It has also closed its Republic of Ireland operations and plans to close two warehouses while investing £90 million to improve automation at its Daventry warehouse.

This company profile was originally featured in the 2023 RetailX United Kingdom Ecommerce country report, click here to download.

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