Homing in on value: why Sainsbury's wants Argos

Commentary by Peter Veash | Internet RetailingPublished 2 Min Read

Sainsbury’s has made an offer of around £1bn for Home Retail Group, the parent company of Argos.  Peter Veash explains the appeal to multichannel retail and ecommerce magazine InternetRetailing.

In the article, author Chloe Rigby notes first of all that “Multichannel expertise, it seems, is key to the attraction.  The two have already worked together with the launch of Argos digital format stores in branches of Sainsbury’s during 2015, while the supermarket used to own Argos sister company Homebase.”

Argos has the right digital assets and delivery infrastructure to meet customer demand. Consumers are more and more switched on and increasingly expect deliveries in hours. Businesses that can deliver a seamless experience and meet consumers’ advanced needs will definitely thrive Peter Veash, BIO CEO

Peter Veash, Chief Executive at The BIO Agency adds: “It makes sense for Sainsbury’s to consider growing their business as the grocery market has become squeezed by the discounters such as Lidl and Aldi.  On top of that, grocery shoppers are changing their shopping behaviour by moving online. 

“Argos is at the forefront of digital and has the right digital assets and delivery infrastructure to meet customer demand.  Consumers are more and more switched on and increasingly expect deliveries in hours.  Businesses that can deliver a seamless experience and meet consumers’ advanced needs will definitely thrive.  Sainsbury’s is no doubt looking to fill a gap and if they succeed in their bid for the Home Retail Group, other grocery giants need to watch out.”

Home Retail Group accepted Sainsbury’s offer of £1.4 in April 2016 and the deal was completed in September of that year. Sainsbury’s has said that the newly formed business will offer more product choice and faster delivery times, making customers’ lives easier.

Update... Home Retail Group accepted Sainsbury’s offer of £1.4 in April 2016 and the deal was completed in September of that year.  Sainsbury’s has said that the newly formed business will offer more product choice and faster delivery times, making customers’ lives easier.

Commenting further on the deal, Sainsbury’s Argos boss John Rogers said “The way people shop is changing – customers expect choice, convenience, flexibility, fast delivery and to shop whenever and wherever they want… Our customers will benefit from great quality products and services and fast delivery networks. 

Sainsbury’s plans to open 30 Argos digital concessions by Christmas 2016, giving customers access to over 90,000 products in total.

 

Read more from Peter on high street tie-ups in Extra space means extra services for the big high street retailers, an article for Campaign.  He also comments on the launch of Amazon’s grocery delivery service in the UK in Talking Retail.

Peter Veash | CEOShare article |
Peter Veash | CEOShare article |
;