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Multichannel tops 40% of total Argos sales

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Some 44% of sales at retailer Argos now come through multichannel services.

First-half results from its parent company the Home Retail Group, published today, showed that the internet accounted for 32% of Argos’ completed transactions in the first six months of its financial year. Its fastest growing channel, however, was the Check & Reserve service, responsible for 21% of all Argos sales during the period. Check & Reserve on Apple devices, which include the iPhone and iPad, alone now counts for 1% of Argos’ total sales. The company says it is now planning to extend the range of mobile applications that it offers.

Some 21% of sales took place through delivery to home, and the company is trialling extended delivery times into the evening for larger items such as furniture.

Argos has also been focusing on widening choice over the internet. It now offers an extra 10,000 lines only via internet, while it said today it would trial an order-in for store collection on some 4,000 of these lines.

Terry Duddy, chief executive of Home Retail Group, which also owns Homebase, said: “We are about to enter our busiest trading period, and whilst we are planning cautiously, we do so from a position of operational and financial strength. This position also allows us to continue to invest in both Argos and Homebase, further extending our multichannel leadership and differentiated formats. This will maintain our competitive advantage and ensure the group remains well-placed for the future.”

The multichannel innovations come against a financial background in which Argos’ sales fell by 6.5% on a like-for-like basis in the 26 weeks to August 28, while Homebase like-for-like sales were down by 0.8%. Overall, group sales fell 3% to £2.7bn and pre-tax profits fell by 11.8% to £103.0m from £116.8m at the same time last year.

The company says its core customers are finding the wider economy challenging. Its half-year statement said: “Many consumers continue to face pressures on the amount of household cash flow that is available for discretionary goods purchases, and in general there is less confidence to spend given the uncertain outlook. Argos’ core customer demographic has been more impacted by the economic conditions.”

Our view: Argos is always a multichannel retailer to watch since it is known for its innovation. What Argos offers today tends to inform future customer demand across the sector – and so has a knock-on effect for other retailers. So what looks interesting about today’s report is the widening of the online-to-store service, both through the fast-growing Check & Reserve service, and through the ability, now being trialled, for customers to order internet-only goods for store collection.

Extended evening hours for the delivery of furniture items will also make Argos one to beat when it comes to the logistics side.

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