Sainsbury’s and Argos: a timeline from merger to sale

The relationship promised to bring more choice for customers and more value for shareholders, but job losses followed in the integration and Argos became a drag on Sainsbury’s performance.

The merger

• January 2015 – Sainsbury’s strikes a deal with Argos owner Home Retail to open mini versions of the GM retailer’s stores inside 10 supermarkets by that summer. Home Retail Group CEO John Walden says a new distribution model enables Argos to provide customers with a choice of 20,000 products at the ‘digital stores’ within hours, irrespective of stocking capacity. Then Sainsbury’s CEO Mike Coupe says it will “bring something new and different to our customers, and fit well with our strategy of making our supermarkets more convenient”.
• January 2016 – Sainsbury’s confirms it made an approach to acquire Home Retail Group, owner of both Argos and Homebase, in a proposed cash and equity deal for an undisclosed sum. The offer was rejected, with Home Retail Group saying it “undervalued” its “long-term prospects”. Sainsbury’s is “considering its position”, with a deadline of 2 February to submit a formal offer.
• February 2016 – Sainsbury’s improves its offer to £1.3bn, saying the merger would create a “food and non-food retailer of choice”.
• March 2016 – Sainsbury’s prepares to raise its offer again in a bidding war with a South African furniture giant Steinhoff, which has tabled £1.4bn.
• April 2016 – The board of Home Retail Group has unanimously backed a £1.4bn takeover by Sainsbury’s. The supermarket was left as the de facto winner after Steinhoff pulled out of the contest. Then Sainsbury’s chairman David Tyler says: “The combined business will offer a multi-product, multi-channel proposition, with fast delivery networks, which we believe will be very attractive to customers and which will create value to both sets of shareholders.”
• March 2017 – Sainsbury’s like-for-like sales have fallen by 0.5% in its fourth quarter – but Argos has come to the rescue with 4.3% like-for-like growth, bumping combined like-for-likes up by 0.3% for the period. The results defy investors who questioned the deal.

The integration

• April 2017 – Sainsbury’s opens the 50^th Argos inside a supermarket, and sets out plans to transform a third of the GM retailer’s estate into digital stores over the coming year, meaning catalogues are replaced with tablets.
• August 2017 – Sainsbury’s begins adding Argos click & collect points to c-stores, enabling customers to pick up a choice of 40,000 Argos products. Some 100 Sainsbury’s Locals are to get them by the end of year.
• March 2018 – Sainsbury’s launches its Tu clothing range at Argos stores, making it available from a total of 1,100 locations by the end of the year.
• January 2020 – In an update to staff on plans to bring Sainsbury’s and Argos closer together, Coupe reveals the senior leadership team has been reduced by more than 20% since the start of the financial year in March 2019. It follows Sainsbury’s failed attempt to merge with Asda in 2018.
• November 2020 – Sainsbury’s is to close 420 Argos stores over the next three years as it continues to integrate the retailer, as well as shuttering the supermarket’s meat, fish and deli counters. Overall, 3,500 roles will be affected, it says.

The drag on performance

• April 2021 – Sainsbury’s posts a £261m pre-tax loss for its full year, despite sales rocketing due to the pandemic. The numbers are hugely affected by more than £600m of exceptional costs related to its transformation plan to integrate Argos, as well £485m of Covid costs. CEO Simon Roberts insists “business is in good shape and has a lot of potential”. The previous November he revealed a plan to take the business back to its roots in its ‘Food First’ plan.
• March 2023 – Sainsbury’s is consulting with 1,400 workers in its distribution network on plans to shutter two Argos depots by 2026.
• July 2024 – Sainsbury’s posts its latest quarter of “strong grocery momentum”, but its overall sales growth has slowed as general merchandise sales and Argos fell back. Grocery sales were up 4.8% in the 16 weeks to 22 June 2024, but GM brings headline growth to a slower 2.7%.

The sale

• September 2025 – Chinese e-commerce giant JD.com has swooped for Argos. But Sainsbury’s ends the talks within days, with its chief Roberts saying the following month it is “not currently in any discussions” to sell the Argos business.
• July 2026 – Sainsbury’s announces it will sell off Argos for more than £120m to a newly established company formed by retail heavyweights Richard Pennycook, Trevor Strain and Matt Truman.