Sainsbury’s share price declines as grocer teams up with Argos

on Jan 30, 2015
Updated: Oct 21, 2019

Sainsbury’s (LON:SBRY) has teamed up with Argos as part of the grocery chain’s plan to use excess space in its stores. Under the terms of the deal, Argos – the online and catalogue retailer owned by Home Retail Group (LON:HOME) – will open concession outlets in 10 Sainsbury’s locations spread across the UK.

Argos, which sells a wide range of products from electronics to garden furniture, revealed yesterday that the stores, ranging in size from 1,000 sq ft to over 5,000 sq ft, will provide shoppers with a choice of over 20,000 non-grocery products, which they can either buy in-store using tablets, or reserve online for collection. It added that an extended range of around 40,000 products could also be ordered in-store for home delivery.

The pilot will be launched by this summer, with more openings to follow if the initiative proves successful. Possible locations for the Argos concessions have been identified, and should be announced within the next few weeks, according to a Sainsbury’s spokeswoman, cited by BBC News.
CEO Mike Coupe said in a statement yesterday that the Argos outlets would complement its traditional supermarket offer. “They will bring something new and different to our customers, and fit well with our strategy of making our supermarkets more convenient,” he remarked.

In November, Sainsbury’s admitted there was under-utilised space in a quarter of its stores and said it would reorganise them to sell more clothes and homewares or put in concessions. The retailer is already home to Timpson shoe repair and Jessops camera outlets.
Sainsbury’s shares opened lower this morning. By 09:27 GMT, the stock had declined 1.27 percent to 260.45p. According to the Financial Times, of the 18 analysts projecting 12 month price targets for Sainsbury’s, the median target is 242.50p, with a high estimate of 330.00p and a low of 155.00p. As of 24 January 2015, the consensus forecast amongst 44 polled investment analysts covering the supermarket group has it that investors should hold their position in the company.
As of 09:49 GMT, Friday, 30 January, J Sainsbury plc share price is 260.35p.

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