The first RetailX Europe Top1000 360° report has ranked sister retail brands Argos and Sainsbury’s in the Elite and Leading categories of this year’s listing, with an extended company profile looking at how they stand out.
Europe Top1000 Elite retailer Argos and Leading retailer Sainsbury’s have worked closely together during the eight years that they have been part of the same group. Sainsbury’s bought Argos in April 2016, cementing an already developing relationship that had seen Argos shops open digital format stores inside the supermarket’s branches.
At the time, Sainsbury’s said the deal would make customers’ lives easier, enabling them to pick up both groceries and a wide range of general merchandise products in one supermarket trip.
Since then, hundreds of digital format Argos stores have opened within branches of Sainsbury’s, while standalone Argos store numbers have declined. As of 2 March 2024, Argos had 1,115 points of presence – 213 standalone stores, 446 in branches of Sainsbury’s and 456 other collection points.
Sainsbury’s had 1,431 shops, ranging from large supermarkets to small convenience stores. By March 2025, there are expected to be about 190 standalone Argos stores and up to 460 within Sainsbury’s branches. Sainsbury’s is the second-largest UK supermarket chain, while Argos boasts having the UK’s third most visited retail website. Both brands promise value and convenience across online and offline channels.
Through its Nectar360 loyalty business, the group is bringing together Sainsbury’s and Argos in a retail media strategy that already works with more than 870 direct clients and through partnerships with agency groups. Sainsbury’s group says that Your Nectar personalised prices are used by more than a million customers each week, while Nectar360 is forecast to add £100mn to Sainsbury’s group profits over the three years to March 2027.
Strategic thinking
Argos, founded in 1972 as a catalogue retailer, is almost a century younger than Sainsbury’s, which was founded in 1869 as a grocers in Holborn. In results for the year to 2 March 2024, parent group J Sainsbury plc reported pre-tax profits of £277mn (-15.3%) on group revenue of £32.7bn (+3.8%). Argos sales grew by 1.6% at the same time, excluding sales from its now closed Irish business.
Sainsbury’s published its Next Level Sainsbury’s strategy in February 2024. In it, the retailer says that half of UK households shop at Argos every year, making it the UK’s third most visited online retail website. It says that more than 70% of its sales start online, that 70% are collected instore and nearly 70% of online click-and-collect orders are available for immediate collection.
However, customers visit the website an average of just three times a year. Sainsbury’s plans to boost this engagement by extending the Argos range, by fulfilling some new product categories directly by suppliers and by investing in the Argos website, app and customer relationship management.
Sainsbury’s is also using technology to improve its own customer experience, introducing real-time grocery forecasting and using cloud technology to improve customer personalisation and rewards. In its contact centre, it is automating some processes.
In the Next Level Sainsbury’s strategy document, Simon Roberts, chief executive of J Sainsbury plc, says: “Our Next Level Sainsbury’s strategy is about giving customers more of what they come to Sainsbury’s for – outstanding value, unbeatable quality food and great service. Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsbury’s, Argos and Nectar.
“We’re going to build on what’s driven our success since 2020. We’re determined to be First Choice for Food, ensuring more customers in more of our stores can enjoy more brilliant Sainsbury’s food. That means more space for our food offer, while still delivering the general merchandise products customers want from us. That way, not only will we find more ways to delight new and existing customers, we will also continue growing volume market share. While I’m proud of the progress we’ve made to date, we’re only just at the beginning of rediscovering quite what this business is capable of.”
The strategy of value and service is reflected in the websites of Argos and Sainsbury’s. On its landing page, Argos makes it easy for shoppers to find the products they are looking for, using automated search suggestions alongside a clear category-based navigation, using filters including age range, price, type, brand and customer rating. When shoppers add in their postcode, they see how quickly they could collect or have a product delivered. Argos flags up in its same-day delivery and collection in its top navigation.
From the product page, customers can see a range of zoomable images and video, as well as recommendations of products that are ‘frequently bought together’ or ‘are in stock for you’.
On the Sainsbury’s website, the value strategy is reflected in a focus on lower prices, meal deals and Nectar prices. Shoppers can save favourite items or store them in their shopping cart. They can name the time and date of their online grocery delivery, saving money when they sign up for regular deliveries through a Delivery Pass.
Sainsbury’s archive of sustainability reports goes back to 2008. Its Next Level Sainsbury’s strategy includes commitments to a more resilient UK food system and transparent use of customer data through its Nectar360 loyalty programme.
Our first RetailX Europe Top1000 360° brings together two strands of RetailX research. The first is the Top1000, now in its ninth year of ranking ecommerce and multichannel retailers by performance.
The second is the more recent 360° reports, which explore markets in the round, from the economic context for retail to retailer performance and how shoppers buy, or would like to buy.
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