Sainsbury’s Reveals Plan To Expand Argos Presence To Nearly All Its Stores

Sainsbury’s has revealed further details of its plans for the recently-acquired Argos chain with its Chief Executive saying he wanted the brand feature in nearly all its stores.

With the exception of some of its very smallest convenience shops, Mike Couple said yesterday that almost every Sainsbury’s outlet in the country will have either a concession or a click & collect point. Sainsbury’s currently operate 602 supermarkets and 783 convenience stores.

Over the coming months, the group will increase the number of Argos concessions from 13 to 30 and open five Mini Habitat stores within its supermarkets. 200 Sainsbury’s store will also have Argos click & collect counters by Christmas.

The move is expected to result in hundreds of Argos outlets located near to Sainsbury’s stores closing with a recent report suggesting up to half the 739-strong chain could be disposed of over the next few years. However, Coupe stressed that while there may be some job losses throughout the process, the company expects to create an extra 1,000 positions as part of the plans.

He was speaking at the opening of Sainsbury’s new flagship store in Nine Elms, south west London, which is the first to feature both Habitat and Argos concessions since the £1.4bn acquisition of the Home Retail Group was completed in September. The 61,000 sq. ft. outlet is described as having a “department store look and feel”.

Coupe commented: “The trend towards shopping in convenience stores and online is well-documented, but supermarkets still take more than £1 in every £2 spent on groceries in the UK and will do so for the foreseeable future.

“Nine Elms is our vision for the Sainsbury’s supermarket of the future – a true destination store for our customers, where they can get everything they need under one roof.”

Despite concerns the integration of Sainsbury’s and Argos will be a significant distraction to management amid the grocery price war with the discounters, Coupe was upbeat on the merged group’s prospects. “Although we have created a very large non-food business, we have plenty of upside opportunity because our market share of non-food is still relatively small,” he said.

“We think the acquisition helps secure our future.”

NAM Implications:
  • Where at: A win-win for Sainsbury’s in terms of greater space utilisation and traffic building.
  • Where headed: Rapid spread to ‘all’ outlets if deemed to be successful.
  • Effect on you: Addition of online speed and 100% availability has to raise the logistics-efficiency bar across all categories.
  • Action: Why not anticipate the obvious and gear up now for the new standards…