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Argos turns to web for future growth

A review of retailer Argos to be published later this month is expected to focus on the next incarnation of its successful internet operation.

More than 42 per cent of Argos’s £3.8 billion sales now come via the internet. It has the UK’s second most popular website after mighty internet retailer Amazon, with 430 million hits in the past 12 months.

The internet offering is the response by Argos to the threat posed by Amazon.

The Argos review, which comes after two years of difficult trading, will be published alongside interims on October 24. Analysts are also expecting an update on underperforming parts of the retailer’s vast store portfolio.

Argos is part of Home Retail Group (HRG), which also owns Homebase and Habitat.

HRG chief executive Terry Duddy said he was seeing a “step change” in internet-driven sales and he wanted the company to continue to harness the consumer-led revolution in how purchases were made. He said: “We are seeing more commerce on mobile devices.”

Mobile sales already account for 7 per cent of Argos’s total sales and are drawing a new type of customer to the firm.

Duddy predicted purchases via smartphone, tablet or laptop would be more “interconnected” in future, making shopping on the move easier.

He has seen a big jump in usage of Argos’s “check and reserve” service, where customers reserve products online and pick up in store a few hours later. The service accounts for 30 per cent of total sales.

Whitechapel in east London is one Argos store where check and reserve has proved popular. Duddy said: “Whitechapel is very successful as it is by a Tube station. People order as they go to work and pick up on their way home.”

He would like more London stores but says costs are too high. Elsewhere in the 739-strong portfolio, stores unlikely to perform well in the long term are being examined for closure on a case-by-case basis as their leases expire. Between 200 and 250 stores could be jettisoned this way over the next five years.

HRG bought home and furniture retailer Habitat last year. It is rolling out some Habitat products in Argos and Homebase stores and plans a standalone concession in its new Ruislip Homebase flagship in north-west London next month. If successful, the Habitat concessions could spring up in more stores.

A revamped Argos website, the fruit of an earlier review, will be launched on October 16.

Source : Tracey Boles –

07 October 2012
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