Sainsbury’s issues major update on Argos store closure plans as nine more branches to disappear from the high street
SAINSBURY’S has issued a major update regarding the closure of more Argos stores.
The supermarket chain, which owns Argos, plans to shut nine more standalone locations in the upcoming financial year.
This move is part of an ongoing strategy to transition the brand’s presence from traditional high street stores to integrated concessions within Sainsbury’s supermarkets.
It comes as Sainsbury’s interim results released yesterday showed sales at Argos slipped by 5% in the 28 weeks to September 14.
Sainsbury’s general merchandise and clothing sales also declined by 1.5% during this period.
Argos’ owner added: “For the full financial year we expect to open 13 Argos stores within Sainsbury’s and close nine standalone stores.”
Sainsbury’s has not yet disclosed the locations of the next round of Argos store closures.
The company also stated that it has not yet informed employees at the stores that will be affected.
A spokesperson for Argos told The Sun: “The transformation of our Argos store and distribution network has been progressing at pace for several years now, improving availability, convenience and service for customers.”
“As part of this, we are continuing to open new Argos stores and collection points in many of our Sainsbury’s supermarkets, enabling customers to purchase thousands of technology, home and toy products from Argos while picking up their groceries.”
Argos has closed dozens of stores over the last two years.
Since March 2023, Sainsbury’s has reduced the number of standalone Argos stores by 72, down to 213 from 385.
However, it has increased the number of Argos stores within Sainsbury’s supermarkets by 22 – from 424 to 446.
Last year all 34 Argos stores in the Republic of Ireland were shut down.
The company blamed the closure of the stores on the investment required to develop and modernise the Irish part of its business as “not viable”.
The most recent closure occurred on October 17, when the Argos store in Plymouth city centre permanently shut its doors.
Before this, the Argos store in Greenock, Inverclyde, unexpectedly ceased operations on September 14.
HISTORY OF ARGOS
FOUNDED in 1972 by Richard Tompkins, Argos revolutionised the British retail landscape with its unique catalogue-based shopping model.
The first store opened in Canterbury, Kent and quickly expanded, becoming a household name.
Customers could browse the extensive Argos catalogue, fill out a purchase slip, and collect their items from the in-store collection point.
The retailer was sold to British American Tobacco Industries in 1979 for £32million before being demerged and listed on the London Stock Exchange in 1990.
In April 1998, the company was acquired by GUS plc.
Throughout the decades, Argos adapted to changing consumer habits, embracing e-commerce early on and launching its website in 1999.
This allowed customers to reserve items online for in-store pick-up, blending the convenience of digital shopping with the immediacy of physical retail.
By 2006, Argos became part of the Home Retail Group which was demerged from its parent GUS plc.
At the time, Home Retail Group also owned Homebase and Habitat.
In 2016, Argos, along with its Home Retail Group sister brand Habitat, was acquired by Sainsbury’s.
Since the acquisition, the Argos brand has been integrated into Sainsbury’s operations, significantly expanding its presence through dedicated concessions within Sainsbury’s supermarkets across the UK.
However, due to declining sales, Sainsbury’s discontinued Argos’ iconic printed catalogue in 2020.
Despite these setbacks, Argos has remained true to its roots, offering a wide range of products from toys and electronics to furniture and jewellery.
SALES UP AT SAINSBURY’S
Despite a decline in sales for both Argos and Sainsbury’s general merchandise and clothing, grocery sales surged by 5% in the 28 weeks leading up to September 14.
The retailer said it was boosted by strong Taste the Difference premium range sales and Nectar membership pricing.
Simon Roberts, chief executive of Sainsbury’s, said: “Our food business is going from strength to strength and we’re making the biggest market share gains in the industry, with continued strong volume growth.
“More and more customers are coming to us for their big food shop, recognising our winning combination of value, quality and service.
“As we head into the festive season, there is real energy and excitement at Sainsbury’s and Argos, and we’re expecting another strong performance.”
Sainsbury’s total underlying pre-tax profit was up 4.7% to £356million.
The supermarket chain is also expected to open 13 new supermarkets in the coming months.
Ten of these new stores, scheduled to open soon, were acquired from DIY retailer Homebase, while the remaining three were purchased from Co-op Food.
However, the boss of the supermarket giant also warned that shoppers will face higher food prices after the Budget’s tax raid on employers.
PRICES TO RISE
Last week, Rachel Reeves hiked the employer rate of National Insurance (NI) from 13.8% to 15%.
She also announced a reduction to the threshold at which businesses start paying NI contributions from £9,100 to £5,000.
It’s estimated that the move will raise £25billion – the equivalent of around £800 per employee for each firm.
Businesses, particularly within the hospitality sector, have warned that the increased financial burden could lead to higher operating costs, which may ultimately be passed on to consumers through price rises.
Mr Roberts said the NI hike would cost Sainsbury’s an extra £140million.
His comments come after Wetherspoons and Marks & Spencer warned of a combined £160million hit from the Chancellor’s decision to increase employer contributions.
Mr Roberts said: “It will lead to inflation and it’s pretty clear it’s going to come pretty fast.
“Given the low margins of the industry, there isn’t the capacity to absorb this level of unexpected cost inflation.”
On Tuesday, the chief executive of Primark’s parent company, Associated British Foods, said he felt “the weight of tax rises” in the Budget was falling on the UK high street.
The Office for Budget Responsibility (OBR) also said last week that the Treasury’s sharp increase in spending would lead to higher inflation in the coming months.
Despite official figures from October showing that inflation fell to 1.7%, its lowest level since April 2021, the OBR expects inflation to average 2.5% this year and 2.6% next year.
INFLATION MATTERS
INFLATION is a measure of the cost of living. It looks at how much the price of goods, such as food or televisions, and services, such as haircuts or train tickets, has changed over time.
Usually people measure inflation by comparing the cost of things today with how much they cost a year ago. The average increase in prices is known as the inflation rate.
The government sets an inflation target of 2%.
If inflation is too high or it moves around a lot, the Bank of England says it is hard for businesses to set the right prices and for people to plan their spending.
High inflation rates also means people are having to spend more, while savings are likely to be eroded as the cost of goods is more than the interest we’re earning.
Low inflation, on the other hand, means lower prices and a greater likelihood of interest rates on savings beating the inflation rate.
But if inflation is too low some people may put off spending because they expect prices to fall. And if everybody reduced their spending then companies could fail and people might lose their jobs.
See our UK inflation guide and our Is low inflation good? guide for more information.