Sainsbury’s to ramp up Argos offering
● Chief executive says expansion will help take the fight to likes of Amazon
The chief executive of Sainsbury’s has outlined ambitious growth plans for Argos as the company rolls out click- andcollect services at 100 convenience stores ahead of the critical Christmas trading period.
A year after Sainsbury’s splashedout £1.4 billion to acquire Argos and Habitat owner Home Retail Group, Mike Coupe said the firm’s rapid expansion will help take the fight to rivals such as Amazon.
The launch of Argos clickand-collect in Sains bury’ s convenience stores is part of a longer term plan to have 2,000 “points of presence” for the general goods retailer.
Coupe said: “Customers are demanding more and more flexibility and more speed in terms of the way they shop with us.
“We would argue very strongly that with the 2,000 points of presence, the great Argos digital capability and the supply chain that backs that up – and the fact that those businesses have access to 27 million customers a week – it gives us a reasonably powerful combination to compete in future.
“ButI don’ t pretendfor a moment that Amazon and others aren’t going to be significant competitors.”
The extended roll-out of click- and- collect, which will enable shoppers to pickup Argos and Tu clothing productsat convenience stores, comes alongside an integration programme that has seen the expansion of Argos stores with Sainsbury’s supermarkets.
The group currently has 100 “stores within stores” and plans to increase that to 150 by Christmas as the battle for festive shoppers begins to pick up pace.
Coupe added that he envisages a time when Sainsbury’s, like Amazon, partners with independent retailers and uses them as deliver y points for Argos goods.
“Overtime youcan imagine there might be different kinds of arrangements, with local community stores for instance as drop off points,” he said.
The chief executive also wants to sell new categories through Argos, such as clothing. Since the takeover, Argos has enjoyed a period of solid sales growth while Sainsbur y’s has floundered, which has made the deal look like a shrewd move.
“We would have faced more criticism if Argos hadn’t performed comparatively well during the period we’ve owned the business.
“But the real test is not whether it trades well for a year, the real test is ultimately whether it makes sense over the mediumto long term ,” Coupe added.
Eyebrows were raised when news of the take over first broke last year, with observers musing that a tie- up between upmarket Sainsbury’s and value- led Argos was a brand mismatch. But Coupe again dismissed the notion.
“I was always confident. There wasa sense that if a Sainsbur y’s customer saw an Argos customer walk towards them, they would cross the road or indeed turn around and run away.
“But you don’t find anybody that says ‘ This is a really bad idea, and I will never shop at Sains bury’ s again because there’s an Argos’.
“They are both mass market consumer brands, twothirds of the population shop at Argos, two- thirds at Sainsbury’s and 40 per cent at both.”
OUTLOOK “The real test is not whether it trades well for a year, the real test is ultimately whether it makes sense over the medium to long term.”
MIKE COUPE, CEO