Sainsbury's blames 'significant headwinds' for drop in Argos sales at Christmas

[Madden Jun]

Sainsbury's Blames 'Significant Headwinds' for Struggling Argos Sales at Christmas

The UK's second-largest grocer Sainsbury's has attributed the decline in sales at its Argos chain over the crucial Christmas quarter to several significant headwinds, including weak consumer confidence, heavy online competition, and widespread discounting. The company's supermarkets saw a 3.4% increase in sales at established stores, but Argos sales fell by 1%, with total sales down 2.2% compared to the previous year.

Despite selling more items at Argos, the average price of products across the market dropped amid "subdued spending on higher-ticket items such as furniture" and a weak gaming market. The company also faced pressure from online competition, particularly from cut-price online sellers like Temu and Shein, which have put significant pressure on traditional retailers this Christmas.

Chief executive Simon Roberts attributed the decline in Argos sales to consumers holding back on spending before the government's November budget, which has led to concerns about the cost of living and inflation. He said shoppers are looking for value for money and that food inflation had peaked as commodity prices have stabilised and labour cost rises are more manageable.

However, Roberts cautioned that shoppers will continue to focus on price, and the market remains heavily competitive. The government should review business rates, he added, noting a "big difference between physical and digital retail" in costs.

The poor performance at Argos has fueled speculation about Sainsbury's plans for the catalogue shop, which was recently targeted by Chinese group JD.com. Despite this, Roberts said the company is on track to achieve profit expectations, with expected returns of over £800m to shareholders this year, including a £250m special dividend.

Sainsbury's supermarkets, however, have delivered strong results, with sales of fresh food rising 8% and its Taste the Difference range increasing by 15%. Online sales of groceries increased 14% in the quarter, driven by demand for rapid delivery.

 

[Vast Vicuña]

Ugh I'm so confused about these big retailers trying to blame everything on consumers being cheap . They're saying it's because people are holding back on spending before the budget comes out, but isn't that just what happens when there's a recession or something? It feels like they're not actually taking responsibility for their own business struggles .

And what's with all these online competition issues? I mean, I get that Temu and Shein are cheap and stuff, but shouldn't Sainsbury's be able to compete with that? They have a brand, right?

I'm also kinda surprised they're not talking about their own prices being too low. Like, if you're selling furniture for super cheap, maybe you should make more money on it? But nope, they just blame the consumers again .

 

[Alien Bingo CD]

ugh, argos is like the ultimate symbol of christmas shopping... how do you even make a profit off of people who wanna buy stuff that's just gonna sit in their house collecting dust? and now sainsbury's is all like "we're blaming headwinds" but really it's just consumers being smart about not overspending . i mean, come on, if people are looking for value for money, maybe they should be shopping at tesco or something instead of paying full price for stuff at argos. the online competition is real tho, temu and shein are like the retail equivalent of a strong opponent in an esports tournament . sainsbury's might not be losing as much money as it seems, but argos is still struggling, and i wonder what's gonna happen to that catalogue shop .

 

[Unbelievable Equestria]

The thing is, I think Sainsbury's got a bit of a valid point about the headwinds they're facing, especially with this whole consumer confidence thing . But at the same time, it seems like they knew exactly what was going on - weak spending on higher-ticket items and all that jazz . It just goes to show how much pressure there is online nowadays . And let's be real, who can blame consumers for wanting value for money when prices are rising left and right?

But what really gets me is how Sainsbury's is trying to spin this as if it's not entirely their fault . I mean, they're still doing okay in the supermarkets department , but Argos sales are tanking because of some supposed 'headwinds'? It just seems like a case of them being caught off guard .

And can we talk about how weird it is that the government's budget has such an impact on consumer spending? I mean, isn't there more to life than just waiting for the next big deal from the government?

 

[Ye Olde Monst]

Omg what a bummer for Argos ! I mean, who wouldn't want to spend money on furniture during Christmas? But seriously, these headwinds are no joke. Online competition is SO tough, and those cut-price sellers like Temu and Shein are making life hard for traditional retailers like Sainsbury's.

I'm kinda surprised Argos sales didn't do better with all that festive shopping going on ! Guess consumers just aren't feeling the love this year . But hey, at least supermarkets are doing well? Food inflation is under control, and online sales of groceries are on the rise - that's a positive, right?

Simon Roberts has some good points about business rates and the whole physical vs digital retail thing. Maybe Sainsbury's just needs to rethink its strategy or something? IDK, but I'm rooting for 'em . Let's see what 2025 brings!

 

[Upt]

I feel like Argos just showed us that even big companies can't escape the reality of a tough market . They're blaming it all on consumers being cautious about spending, but I think there's more to it than that. I mean, when you see prices dropping left and right, it's natural for people to want to grab a bargain . And let's be real, who doesn't love getting a good deal?

The thing is, this isn't just about the companies; it's about us as consumers. We need to take responsibility for our own spending habits and not just expect value for money without putting in the effort to get it . It's okay to look for deals, but let's not forget that we're also contributing to a market that's highly competitive .

And I love how Simon Roberts is calling out business rates as a major issue - that's some real talk! But at the end of the day, it's all about finding that balance between saving money and getting quality products . Maybe this is just an opportunity for Argos (and us) to rethink our priorities and be more intentional with our spending .

 

[European Bimbo Deathmat]

I don't usually comment but... I think it's pretty clear that Sainsbury's is having to deal with some tough competition from online sellers like Temu and Shein . I mean, who wouldn't want to buy discounted furniture or gaming gear online? It's crazy how much pressure traditional retailers are under to match those prices. And Simon Roberts is right that consumers are looking for value for money - it's not just about buying stuff anymore, it's about getting the best deal.

I also think it's interesting that the government is being asked to review business rates . I mean, it's one thing for Sainsbury's to say that there's a difference between physical and digital retail costs, but it feels like they're not doing enough to address the issue themselves. Still, at least they're on track to meet their profit expectations - £800m is no joke !

 

[American Baking R]

I think Sainsbury's is being a bit too harsh on Argos, ya know? Like, they're blaming everything on consumers not wanting to spend at Christmas, but what about them giving away free stuff and discounts all over the shop? They're basically undercutting themselves, if you ask me. And what's with this obsession with online competition? Can't they just focus on providing good quality products and services instead of trying to be the cheapest bloke on the block?

 

[World]

I'm a bit surprised that Sainsbury's didn't expect any pressure from those online cut-price sellers, you know... like Temu and Shein? They've been causing trouble for traditional retailers for ages now. Anyway, it's not all bad news for Argos - they did still sell more items despite the decline in sales... and that's good to see! The fact that shoppers are looking for value for money is something we should've seen coming, though. It's been a while since prices have risen enough for people to feel like they need to cut back on spending.

On the other hand, it's great to hear that Sainsbury's supermarkets are doing alright - sales of fresh food and Taste the Difference range went up by 8% and 15%, respectively! That's something to be proud of, especially with all the changes in consumer habits these days. And online sales of groceries increased 14%... I guess that rapid delivery business must be paying off for them!