Close this search box.

Sainsbury’s faces Argos D-Day, b2b sector faces Amazon challenge, put a face to a name at EDX16


D-Day for the much discussed Sainsbury’s / Argos takeover is almost upon us. Or is it?
The deadline for a final, binding offer is 18 March – also known as this Friday. As things stand Argos has two potential suitors, one being Sainsbury’s and the other the lesser-known-in-these parts South African retail giant, Steinhoff, which owns Bensons for Beds and Harveys.

Steinhoff has 6,500 retail outlets in 30 countries. It is also a manufacturer, and has 22 manufacturing facilities, which source items and materials from 44 different countries. All in, it has in the region of 90,000 staff.

Plenty of people in the UK haven’t heard of Steinhoff, but it’s no minnow, and with a stated aim of being a “leading value and discount retailer” within all the markets it operates in, it clearly has serious designs on Argos.

Early last month, we thought it looked like Sainsbury’s bid £1.3bn for Argos would be successful. But Steinhoff countered with a bid of £1.4bn; the South African’s are believed to have had their eye on Home Retail Group for some time. With a market-cap of £20bn (compared to Sainsbury’s £5bn) Steinhoff has considerably deeper pockets, should it decide losing out is not an option.

But over-paying in business acquisition is a little like taking out a loan in order to pay your own wages – it’s unsustainable, bonkers, and will require an intervention of some sort eventually. Indeed, Sainsbury’s has been told by some of its larger shareholders to avoid countering Steinhoff’s bid by going all in.

The synergies between Argos’s much-admired delivery and collection network, and Sainsbury’s desire to be a pack-leader in the food-to-non-food sector make their combination look like a match made in retail heaven. When you factor in Sainsbury’s recent strong financial performance (it’s just seen its first sales increase in two years), despite being smaller than its South African rival, the supermarket may be well placed to pull this off.

But wait.. that growth Sainsbury’s is experiencing is mostly coming from online sales, not physical stores; expect store closures should Sainsbury’s win out, then.

The deadline for a revised bid is 5pm GMT Friday 18 March.

After which, Steinhoff could exercise its rights (under the UK Takeover Panel’s rules) to a 53 day rebuttal and re-bid period.

It’s not over yet.

While we’re waiting for the outcome of that, it’s business as usual for ecommerce in the Nordics, which continues to grow rapidly… 15% growth across 2015, according to PostNord’s annual survey.

Convenient deliveries are important, as are returns, but one of the big factors is cross-border ecommerce, with the UK being the biggest single beneficiary of Nordic consumers’ online shopping trips. You’ll find more on that here.

Another sign of cross-border optimism comes from the other side of the Atlantic, where the US government has increased duty thresholds for goods imported. That means items less than $800 in value should avoid duties (although there are always going to be exceptions, of course). Previously the threshold had been a measly $200, so that’s good news for anyone targeting US customers. There are also benefits in terms of reduced red tape which will keep shipping costs down too.

Elsewhere on eDelivery, we have a guest-authored article from Mark Thornton of Maginus on the subject of b2b delivery and the threat posed by Amazon. Over in the States, Amazon Business is already competing with wholesalers, so how long before we see it here in the UK and what on earth should you do to remain competitive?

As you may be aware, our second ever eDelivery Expo, EDX16, takes place on 27 & 28 April. Last year more than 5,000 people attended the two day event, which is co-located with InternetRetailing Expo, and I’m hoping to meet as many eDelivery readers there as possible next month. You can find details on the event, including how to register here. You can also find an overview of Day Two here.

And finally, one of the core themes of EDX16 being how multichannel retail calls upon a different outlook in order to stay competitive, appealing to customers, and most importantly profitable. With that in mind, we’ve dusted off a feature we ran only a few weeks ago looking at the problems of operational silos. Hopefully that’ll galvanise you into registering, if you haven’t already.

As always, if you haven’t subscribed to eDelivery yet we’d love it if you did. You’ll get a weekly newsletter summarising the main stories we’ve covered, and we’ll keep you informed of other big announcements. But we won’t spam you – you don’t like spam, do you? We don’t. You’ll find details on subscribing here. And if you’re not receiving a copy of the magazine you’ll find details on that too.

You can also join our LinkedIn group for analysis and networking as it happens, or if you want your updates in real-time find us on Twitter @edeliverynet.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on