Argos enjoy double-digit online growth as parent Home Retail Group waits for buyer
Home Retail Group said more than half of its sales were made online in its latest full-year, as it reported double-digit online sales growth at Argos amid what chief executive John Walden described as a “rather eventful period for the group”. M-commerce sales at the general merchandise retailer now account for 28% of all sales – more than £1bn.
Home Retail Group is currently waiting for the outcome of “possible offers” from Sainsbury’s and Steinhoff International for the general merchandise retailer. The deadline for offers is March 18.
This week Home Retail Group said Argos had turned over £4.1bn in the year to February 27, including £515m in the fourth quarter. Online sales grew by 13% to account for 51% of total Argos sales. At the same time last year, they accounted for 46% of total sales. Mobile sales grew by 15% and represented 28% of total Argos sales, from 25% the previous year, when mobile sales topped £1bn for the first time.
Overall sales were flat in the full-year and up by 1.9% in the fourth quarter. But like-for-like sales, which strip out the effect of store openings and closures, were down by 2.6% in the full-year and 1.1% in the quarter as the company opened more stores However, the group said it measured the cannibalisation of new space – it opened 94 digital format stores and collection points during the year, increasing selling space by 3% in the fourth quarter – at about 1% – which meant that like-for-like sales had in fact stayed flat during the year.
The company also said its Fast Track service, introduced ahead of peak trading, had grown in popularity since launch.
“I am pleased with the continued improvement in Argos’ sales performance in the period, together with the continued progress in the Argos Transformation Plan to become a digital retail leader,” said John Walden, chief executive of the Home Retail Group. “In October, we introduced FastTrack – market-leading propositions for same-day home delivery and store collection. Since its introduction, customer awareness of FastTrack has continued to grow and its operations are improving, with both on-time delivery rates and customer satisfaction now at leading levels. Along with FastTrack the combination of our now proven digital concessional model, together with improvements in digital experiences have driven increases in both digital sales and digital participation.”
The company last month sold Homebase , a Leading company in the IRUK Top500, for £340m. Today Home Retail Group reported its full-year sales figures – it turned over £1.4bn in the full-year and £183m in the fourth quarter. Total sales were down by 3.1% in the full year, but rose by 5.2% on a like-for-like basis as space decreased by 8.3% during the year.