Sainsbury's has reported a decline in sales at its Argos division. Argos is part of the Sainsbury's Group as their home-division, offering a wide range of products, including electronics, home goods, and toys, through online and in-store services making them of one of the largest retailers in the UK.
For the third quarter, which ended on 4th January 2025, Argos experienced a 1.4% drop in sales. While the retailer saw improvements in its digital services, product offerings, and delivery promotions, these gains were overshadowed by weak customer spending outside key shopping periods such as Black Friday and Christmas.
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According to Sainsbury's, its digital proposition, delivery services, product range, and promotions led to positive traffic trends and sales growth during the peak weeks of Black Friday and Christmas. However, these gains were insufficient to counterbalance the decline in sales and gross margins caused by subdued customer spending for the remainder of the quarter and a highly promotional market environment.
The group noted improvements in customer satisfaction, particularly regarding promotions, product variety, availability, and website ease of use. 'One in four people in the UK visited the Argos website over Black Friday weekend, a significant increase YoY,' the company stated. Despite these positive developments, the sales figures for larger ticket items, including furniture, remained weak during the quarter, reflecting the overall subdued demand in the market.
Technology products performed well, showing strong sales growth, while the toy market underperformed. The furniture and larger consumer electronics categories also experienced a downturn in customer demand, contributing to the overall sales decline in Argos.
In response to operating cost inflation in 2025, Sainsbury's is taking steps to improve its operations, including a 5% pay increase for its retail colleagues, which will be implemented in two stages, in March and August. The company believes that engaged and satisfied staff are key to delivering strong customer service, and this pay increase is part of its strategy to further enhance the overall customer experience.
Source: www.furniturenews.net