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Argos-Owner Posts Big Drop In Year-End Like-For-Like Sales

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Reuters 12/3/15

'

(Reuters) - Britain's biggest household goods retailer Home Retail (HOME.L) delivered a weaker-than-expected finish to the year at both its Argos and Homebase chains, although it said cost controls and improvements to its margin had helped the bottom line.

The group said it expected pretax profit for the year to be at the top end of market forecasts of 120 million pounds to 132 million pounds. Analysts on average expected 123 million pounds, according to Reuters data.

The company said like-for-like sales at its bigger Argos chain fell 5 percent in the eight weeks to end-February, falling far short of forecasts of a 0.2 percent fall, reflecting poor demand for consumer electronic products.

Sales at its Homebase DIY chain on the same measure also disappointed, dropping by 0.9 percent against predictions for a rise of 0.4 percent.'

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Reuters 12/3/15

'

(Reuters) - Britain's biggest household goods retailer Home Retail (HOME.L) delivered a weaker-than-expected finish to the year at both its Argos and Homebase chains, although it said cost controls and improvements to its margin had helped the bottom line.

The group said it expected pretax profit for the year to be at the top end of market forecasts of 120 million pounds to 132 million pounds. Analysts on average expected 123 million pounds, according to Reuters data.

The company said like-for-like sales at its bigger Argos chain fell 5 percent in the eight weeks to end-February, falling far short of forecasts of a 0.2 percent fall, reflecting poor demand for consumer electronic products.

Sales at its Homebase DIY chain on the same measure also disappointed, dropping by 0.9 percent against predictions for a rise of 0.4 percent.'

Why do Argos even exist? Is it for people who have cash not cards? Or can't get to IKEA? Or can't wait for free home delivery?

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Crickey those sales numbers are miles off market expectations. No wonder the share price is tanking today. This corresponds with the BRC price data in that non-food prices are being heavily falling.

Surprised they have not spun off homebase. The proportion of owners in the lower age bracket continues to fall. Some may not even know what Homebase is or experience their high prices!

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Why do Argos even exist? Is it for people who have cash not cards? Or can't get to IKEA? Or can't wait for free home delivery?

They're a very convenient way to shop - you check if something you want is in stock at your local store and reserve it via their website, then go in and pick it up the same day with minimal hassle (usually).

You can also get stuff delivered to your local store for pickup, from a lot of eBay sellers.

For many people these days, picking stuff up at a store is less hassle than home delivery.

They also have some quite good deals - worth keeping an eye on discount sites for Argos offers.

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I ordered an item from Argos and was told it would be available to pick up after 5pm. At 5:01pm I turned up at the store to be told by the manager that the till was closed at 5 so would have to come back. I did not return for the item and will not waste my time using them again.

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Dredging up this thread.

Sainsburys plc are all set to finalise the deal for Home Retail Group (Argos). Argos are running discount codes all over the shop - 10% off instore through Quidco, 25% off home, discount if use fast delivery, giving instore vouchers if spend over £xetc. Not sure if it's connected.

Certainly Sainsbury plc will have increased non-food exposure and challenge of integration.Noticed some technology prices- e.g. television prices heading rapidly south. Also petrol pump prices have jumped up a bit so maybe incomes are being squeezed again.

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You can also get stuff delivered to your local store for pickup, from a lot of eBay sellers.

I've noticed this option on a lot of ebay listings, items ranging from electric radiators to a packet of nails. Why would Argos want to offer this service on small items, I can't see how they can make money from the hassle of receiving, storing, then issuing these cheap items to the customer collecting - Smacks of desperation and a failing old business model?

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I've noticed this option on a lot of ebay listings, items ranging from electric radiators to a packet of nails. Why would Argos want to offer this service on small items, I can't see how they can make money from the hassle of receiving, storing, then issuing these cheap items to the customer collecting - Smacks of desperation and a failing old business model?

How much margin does Argos make on their usual cheap lines? Receiving, storing and issuing is their main business - so they can do it efficiently. This is pure profit on top of their existing business model. I don't know how much it makes them, but it is surely easy money.

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How much margin does Argos make on their usual cheap lines? Receiving, storing and issuing is their main business - so they can do it efficiently. This is pure profit on top of their existing business model. I don't know how much it makes them, but it is surely easy money.

How much can the ebay seller be paying Argos for the service when they presumably have already stocked it their selves and now have to ship it to another party, for a cheap item that has to be competitively priced on ebay to start with? I'd suggest not a lot, given competition from other sellers that are shipping direct to door via a low cost courier. It can't be pure profit on top because it requires warehouse/store space and staff to process it, resources which would of normally been used to process their own lines that have come direct from the manufacturer. Perhaps the stores have over capacity for current demand of normal purchases.

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I've noticed this option on a lot of ebay listings, items ranging from electric radiators to a packet of nails. Why would Argos want to offer this service on small items, I can't see how they can make money from the hassle of receiving, storing, then issuing these cheap items to the customer collecting - Smacks of desperation and a failing old business model?

How much does it cost to get footfall into your shop? What Argos seem to do reasaonably well is some special deals ont he shop floor - just the ort of thing to trigger the unexpected purchase. Also potenitally makes a customer out of someone who may never regularly visit the shop due to its location / habit.

Edited by onlyme2

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How much does it cost to get footfall into your shop? What Argos seem to do reasaonably well is some special deals ont he shop floor - just the ort of thing to trigger the unexpected purchase. Also potenitally makes a customer out of someone who may never regularly visit the shop due to its location / habit.

As far as I'm aware there are a variety of incentives for High St retailers to carry certain brands.Any increase in footfall is therefore welcome.

I think it's a shrewd move on their part in that it may extend their sell by date.

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I have used the ebay pick up service quite a bit recently. Seems since around Christmas the majority of things I have bought have been available this way. It's much handier than waiting in or post office pick up as it's open 9-9 weekdays and weekends.

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Most things sold in argos you need a home to put them in......either create more homes or import more people with needs. ;)

Edited by winkie

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