Sainsbury’s increases sales as its deadline for Argos owner bid looms
Sainsbury’s chief executive Mike Coupe has cheered a return to sales growth days before a crucial deadline on the grocer’s £1.4 billion bid for Argos owner Home Retail Group. Sansbury’s is the only one of the ‘big four’ supermarkets to increase sales in the latest trading period.
Coupe has until Friday to decide whether to embark on a career-defining tilt at HRG, along with its rival suitor, the South African retailer Steinhoff.
HRG’s boss John Walden has urged both sides to hurry up – saying the takeover was becoming a distraction – but Sainsbury’s hinted that it would leave any bid up to the wire of Friday at 5pm and would be happy to walk away.
The latest questions over the bid came as the supermarket revealed same-stores sales rose 0.1% in the nine weeks to March 12 – the first like-for-like sales rise since Coupe took over from Justin King in 2014 and the first positive growth for two years.
Coupe, who is bound by strict take-over rules, refused to say why Sainsbury’s would be the most suitable new owners for Argos or how likely a new bid would be.
But he reiterated that Sainsbury’s would not overpay. An informal offer of £1.4 billion has already been tabled, which analysts suggested could rise after Argos revealed an extra £100 million on its balance sheet last week.
Coupe said: “If this doesn’t happen… we’ll get on and execute perfectly well if we don’t do the deal. I don’t feel any personal pressure.”
Sainsbury’s has been stalking Argos for several years. It revealed in December that it had made serious enquiries into a takeover of its parent company following a trial of 10 Argos concessions in its biggest supermarkets.
Home Retail sold its other business Homebase to Australian outfit Wesfarmers for £340 million last month, leaving the path clear for Sainsbury’s to pursue Argos. But Steinhoff – which already has interests on the high street including New Look and Virgin Active gyms – muscled in with a counter-offer.
Coupe admitted the sales rise was down to strong internet sales – up 14% in the period – meaning that sales at its 1200 supermarkets and convenience stores remain in negative territory.
Sainsbury’s welcomed more shoppers to its stores and Coupe added that entertainment had done particularly well. This was partly because of major releases including Adele’s new album 25 and latest James Bond film Spectre on DVD.