Argos "well positioned" to face Amazon challenge amid transformation

Argos is “well positioned” to face up to the challenge of Amazon and other online retail giants, according to bosses at parent firm Sainsbury’s.

Paula Nickolds, the boss of the grocery giant’s general merchandise business including Argos, said the retail brand has maintained its “strong emotional bond with customers” despite changes to its operations amid shifting consumer habits.

It comes as the high street stalwart marks 50 years since it was founded by Richard Thompson in July 1973.

The originally catalogue-oriented retailer rapidly grew across the UK to become one of the UK’s most recognisable high street brands.

However, its recent history has come against a backdrop of fierce change in the retail industry amid the intense competition of online general retailers.

Argos was taken over by Sainsbury’s, the UK’s second largest supermarket chain in 2016, as part of its £1.4 billion takeover of Home Retail Group.

Three years ago, Argos announced it would discontinue production of its recognisable printed catalogue as it blamed weaker demand for it from shoppers.

Nickolds said the retailer has reinvented parts of its business over the years in order to keep up with what customers want.

"There are many customers who hold a lot of nostalgia for our catalogues and products like toys they bought from us years ago, but our ability to transform and keep relevance with customers is a really exciting thing to be a part of," she said.

"This industry doesn’t stand still so Argos hasn’t either. But if you look at data like our customer satisfaction figures it shows customers continue to have a very positive relationship with our brand.

"And for us, we really hope that future generations will also have that relationship with Argos."

Changing consumer demand also saw the business reveal three years ago that it planned to close the majority of its standalone shops as it shifted further towards toward sites within supermarkets and its delivery operation.

Sainsbury’s has said it expects to have 160 standalone stores and between 430 and 460 Argos counters within its supermarkets.

When asked whether changes will help Argos against the challenge of industry titan Amazon, Nickolds said: "Everything we’ve been doing recently means we are very well-position to face that challenge.

"The breadth of our business gives us a unique position when it comes to next day delivery and collection across the country."

Earlier this month, Sainsbury’s revealed that Argos sales grew by 5.1% over the 16 weeks to June 24, to drive growth in its general merchandise arm.