Argos would probably have gone bust during Covid had it not have been able to rely on Sainsbury's as a way of continuing to trade via click and collect.
Sainbury's removed massive cost from Argos by:
Closing many standalone stores with a saving on rent and occupancy costs and staffing costs
Closing Argos Head Office in Milton Keynes and merging functions with Sainsbury's (will need to be unpicked over the next few years...)
Rationalising supply chain. There was still more work to do in this area but lots of the low hanging fruit had been picked (and the writing was on the wall a couple of years ago when many integration projects were 'paused')
Going forwards Sainsbury's will get rent from Argos for the store in stores and ther ewill be commercial agreements, at least in the short to medium term, for many shared functions.
City analysts always seemed to give Sainsbury's a hard time over Argos and its impact on the overall performance of the business so it will be interesting to see how things go now. I do hope Argos survives but I also wonder whether it will become another Lloyds Pharmacy (Sainsbury's used to operate in-store pharmacies themselves but sold them in 2016 to Lloyds Pharmacy. By 2023 Lloyds pulled out of them all)
Sainbury's removed massive cost from Argos by:
Closing many standalone stores with a saving on rent and occupancy costs and staffing costs
Closing Argos Head Office in Milton Keynes and merging functions with Sainsbury's (will need to be unpicked over the next few years...)
Rationalising supply chain. There was still more work to do in this area but lots of the low hanging fruit had been picked (and the writing was on the wall a couple of years ago when many integration projects were 'paused')
Going forwards Sainsbury's will get rent from Argos for the store in stores and ther ewill be commercial agreements, at least in the short to medium term, for many shared functions.
City analysts always seemed to give Sainsbury's a hard time over Argos and its impact on the overall performance of the business so it will be interesting to see how things go now. I do hope Argos survives but I also wonder whether it will become another Lloyds Pharmacy (Sainsbury's used to operate in-store pharmacies themselves but sold them in 2016 to Lloyds Pharmacy. By 2023 Lloyds pulled out of them all)