More than half Argos sales now multichannel

More than half of Argos’ sales are now multichannel, its parent company said today. Announcing its full-year results, the Home Retail Group said 51% of total sales now involved the internet alongside other sales channels. Ecommerce alone grew by 10% and now accounts for 42% of Argos’ total sales.

The news came as Home Retail Group reported flat sales and falling profits in the 52 weeks to March 2. Group sales dipped slightly to £5.475bn in the year to March 2, down from £5.583bn in the previous year, while Argos’ sales were flat at £3.93bn, from £3.95bn the previous year. Homebase sales fell to £1.43bn from £1.54bn. Home Retail Group said both companies had seen their market share grow, in a declining market. Pre-tax profits, before exceptional items, fell to £91.1m from £115.7m last time, while bottom line pre-tax profits rose to £130.1m from £104.1m.

Home Retail Group chief executive Terry Duddy said the year had been an encouraging one, with both Argos and its sister company Homebase growing market share. “Argos delivered like-for-like sales growth for the first time in five years,” he said, “and multichannel sales broke through the 50% threshold. Our strong financial position enables Argos to deliver on its transformation plan to become a digital retail leader and for Homebase to invest in the rollout of its new proposition.

Argos is currently six months into a ‘digital first’ transformation plan, that aims to make its online, mobile and tablet commerce the primary sales channels. The plan also includes providing more choice of products, to be available to customers faster, developing a ‘universal’ customer offer and operating a leaner cost base.

So far, the company has introduced one-click Check & Reserve, an iPad app, improved its website and mobile site, and is currently trialling a hub and spoke distribution model, as well as new Argos catalogue formats that allow immediate collection on some lines and next-day collection on an extended range of online products.

Digital in-store innovations such as a web-based catalogues, wi-fi, and fast-track online collection services will be trialled in the coming financial year. But Argos also said it would stop running its TV shopping channel trial, launched in June 2011, this month.

During the last financial year, Argos saw 51%, or £2bn, of its total sales come from multichannel sales, up from 48% a year earlier. Internet sales hit 42% of total sales, while online Check & Reserve –still Argos’ fastest growing channel, accounted for 31% of sales. Website and app visits were up by 24%, and mobile commerce now represents 10% of Argos’ total sales. Some 90% of sales involved the store in some way, although the company is still looking to rightsize its store etate, and plans around 10 closures in the coming year.

Homebase has also developed its digital offer, with multichannel sales growing by 16% over the year to represent 5% of total sales. Reserve and Collect was the main driver. It is trialling new store formats, with higher levels of service and aimed at giving customers ideas and inspiration for homes and gardens.