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Sainsbury’s sets out how Argos acquisition will accelerate strategy of making customers’ lives easier

Sainsbury's sets out how Argos acquisition will accelerate strategy of making customers' lives easi

Sainsbury’s this week set out how its acquisition of Argos would speed up its strategy of growing the business by making its customers’ lives easier.

The retailer said, in half-year results, that the acquisition enabled it to target 250 digital Argos stores within its branches in the next three years, of which 30 will be open by Christmas, up from 22 now. These will be among 200 digital collection points opened for Sainsbury’s non-grocery brands in stores this year.

Mike Coupe, Sainsbury’s chief executive, said: “The acquisition of HRG accelerates our strategy to give customers choice, convenience, speed and flexibility in when, where and how they shop.”

The retailer says its strategy reflects a continuing change in customer behaviour towards shopping more often and more widely across different channels and store formats. But, it said, despite the growth of convenience stores, online retail and discount retailers, it expects supermarkets to remain the key grocery channel. It is therefore adapting its stores to reflect changing customer needs. Its store at Nine Elms, for example, now includes an Argos digital store alongside a Habitat, Sushi Gourmet, Lloyds Pharmacy, Explore Learning and Starbucks.

Coupe added: “Two years ago we set out our strategy to make our customers’ lives easier, offering great quality and service at fair prices, serving our customers whenever and wherever they want. We have made good progress delivering this in challenging market conditions.

“We have invested in the quality of our products while reducing prices on everyday items, delivering volume growth and outperforming the market in customer service and availability. To meet growing demand for home delivery groceries in London, we opened a new online fulfilment centre. By Christmas we will open 30 Argos digital stores and create a further 30 Argos digital collection points in our supermarkets. These will form part of a rollout of 200 new digital collection points where customers can collect Tu clothing, eBay and DPD parcels.”

Looking to the future, Sainsbury’s expects customer expectations to continue to rise. Shoppers will want more flexibility in how and when they shop, and the speed at which retailers fulfil their orders. It said in today’s statement: “Technology raises customers’ expectations, but should also help retailers to meet them efficiently. Price transparency, another product of technology, brings challenges to some retail models but, over time, is removing price as a point of differentiation in favour of quality and service. Retailers will succeed through efficiently offering competitive prices, differentiated, high quality product ranges and services and a range of flexible and convenient delivery options.”

Sainsbury’s group sales of £13.9bn in the 28 weeks to September 24 were 2.1% up on the £13.6bn reported at the same time last year while pre-tax profits of £372m were 9.7% up on the £339m reported a year ago.

Online grocery sales rose by 8% to contribute £1.3bn in annualised sales, and by Christmas the supermarket will offer same-day grocery delivery from 30 stores. One-hour deliveries are being trialled.

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