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Aug 29, 2017
By WGSN Insider
Sainsbury’s is planning ambitious growth for its Argos banner as the UK supermarket giant rolls out click & collect services at 100 convenience stores ahead of the Christmas trading period. The parent also wants to sell new categories through Argos, such as clothing, it also said Tuesday.
The extended click & collect plan will also allow shoppers to pick up its Tu branded clothing from the additional points of service.
A year after Sainsbury’s spent £1.4bn to acquire Argos and Habitat owner Home Retail Group, CEO Mike Coupe told the Press Association that the company’s rapid expansion will help take the fight to rivals such as Amazon.
The launch of Argos click & collect in Sainsbury’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 27m customers a week – it gives us a reasonably powerful combination to compete in future.”
But he pointedly added: “I don’t pretend for a moment that Amazon and others aren’t going to be significant competitors.”
The extended roll-out of click & collect comes alongside an integration programme that has seen the expansion of Argos stores with Sainsbury’s supermarkets. Sainsbury’s currently has 100 store-in-stores and plans to increase that to 150 by Christmas.
Coupe added that he envisages a time when Sainsbury’s, like Amazon, partners with independent retailers and uses them as delivery points for Argos goods. “Over time you can imagine there might be different kinds of arrangements, with local community stores for instance as drop off points,” he said.
Since the takeover, Argos has enjoyed a period of solid sales growth while Sainsbury’s has floundered: ”We would have faced more criticism if Argos hadn’t performed comparatively well during the period we’ve owned the business,” he noted.
“But 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.”
Coupe added: ”They are both mass market consumer brands, two-thirds of the population shop at Argos, two-thirds at Sainsbury’s and 40% at both – it’s the sweet spot of where you want to be.”
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