Sainsbury’s is preparing to raise its £1.3bn bid for Argos as the deadline looms in its takeover shoot-out with a South African furniture giant, The Sunday Times (£) wrote yesterday. Steinhoff shattered Sainsbury’s tentative cash-and-shares agreement with Home Retail Group, Argos’s parent, when it tabled a £1.4bn counterbid three weeks ago. The two suitors have until 5pm on Friday to make formal offers or walk away.

Sainsbury’s is considering raising its offer for retailer Argos to £1.5bn after its parent group waved a £100 million ‘carrot’ at bidders last week, writes The Daily Mail. A higher offer has been made possible by a surge in Sainsbury’s own share price and the revelation late last week that Argos has £100 million more than previously thought in reserves.

Simon Goodley writes in The Observer on the takeover sage, saying: “Argos’s owner, Home Retail Group, became the target of a bid by Sainsbury’s, which morphed into a bidding war when South African retailer Steinhoff trumped the grocer’s offer. We are now left with the kind of standoff you might expect in an Argos store when a pair of shoppers scrap over the final Black & Decker.” (The Guardian)

Tesco CEO Dave Lewis has warned that the retail sector could come under intolerable pressure unless George Osborne pledges to reform business rates. He said there was a real risk of increasing pressure on employment in traditional retail if Britain’s business rate regime, which “disproportionately” affects bricks-and-mortar retailers, was not fundamentally reformed. (The Times £). Lewis threw his weight behind a report by the British Retail Consortium that said there could be 900,000 fewer jobs in retail by 2025 as costs including business rates and the national minimum wage rise. Lewis said: “If the government is not careful, it is going to keep piling on the burden. Business rates are the single biggest tax Tesco pays – £700m a year.” (The Guardian)

Sir Philip Green could face a demand of £280m over BHS’s pension deficit — more than three times the sum he has so far offered to pay. The Pensions Regulator is pursuing the billionaire boss of Arcadia for a contribution a year after he sold the lossmaking department store chain for £1 to a consortium. (The Sunday Times £). The Pensions Regulator is understood to be considering whether to order Green to pay £280m of the £300m it would cost the “lifeboat” Pension Protection Fund (PPF) to make good the gap if it is called upon to take the scheme on. (The Guardian)

“Green doesn’t fly the BHS plane, but he may still pay for pilot error,” writes Ben Marlow in The Telegraph. “As the plane heads straight for the mountain, it wouldn’t be a huge surprise if the Pensions Regulator asks the combative billionaire to dig much deeper, even if he is no longer at the controls.”

Meanwhile, landlords of BHS have cast doubt on the future of the stricken retailer by warning the department store chain could collapse even if it agrees a rescue deal with creditors. Property owners behind a host of BHS stores have told The Sunday Telegraph the retailer’s attempts to secure wide-ranging rent cuts are unlikely to safeguard its future. (The Telegraph)

Retail profit margins will be squeezed over the next decade as shoppers increasingly demand home delivery, researchers have predicted. Buying online can cost retailers 20 times as much and may lead to a 1.5% decline in profit margins by 2025, according research by OC&C Strategy Consultants. (The Times £)

High street shops felt the pain in February as more people migrated online or to bigger stores out of town. Activity last month was 1.1% down compared with a year ago, according to the British Retail Consortium and Springboard (The Times £). Shoppers are deserting the high street in favour of purpose-built retail parks, according to figures that underline tough conditions for retailers. (The Guardian)

Britain’s biggest companies are facing a £200bn property debt time bomb thanks to new accounting rules, with Tesco’s lease liability alone set to more than double to £17.6bn. Around 85% of large companies’ leases are currently held off balance sheet, according to research by property advisory company Cushman & Wakefield – all of which now have to be declared within a three-year window. (The Telegraph)

In an interview with The Observer, Iceland boss Malcolm Walker explains why he hopes selling upmarket lines will help the retailer fight rival discounters. “We have been fighting on price for many years. Everybody knows we are cheap. Now we are trying to convince you that our food is better than you think it is,” he says. (The Guardian)

“Investors will find it hard to resist a piece of Hotel Chocolat,” writes The Financial Times (£). “It is testament to success of brand that bankers reckon it could be worth £150m when it floats”

Vodka distiller Stock Spirits faces an uprising led by its biggest shareholder after a prolonged spell of weak trading. Luis Amaral, a Portuguese cash-and-carry tycoon whose family office holds a 9.7% stake in Stock Spirits, is understood to have been frustrated with the results of a strategic review announced alongside last week’s results. (The Sunday Times £)

The Telegraph’s Questor column looks at Fever-Tree, writing: “Fever-Tree, the luxury tonic maker, is expected to report a tripling of annual profits tomorrow, tempting investors to snap up the shares after they have dropped 7% this year during the wider sell-off. But we would be careful of a hangover from the punchy rating on the shares.”

British winemakers are urging George Osborne to take action on wine duty. The wine in a £5 bottle bought in Britain costs only 47p: the rest is duty, VAT, packaging, logistics and profits for the retailers. (The Guardian)

An increasingly bitter row between New Delhi and Monsanto, the US chemicals group that revolutionised Indian cotton farming, is fuelling concerns over how foreign companies are treated in the country even as the government seeks to lure international investment. (The Financial Times £)

Sainsbury’s has opened its smallest ever store – which will stock almost no groceries. Its new micro store, in Richmond, Surrey, is only 753 square feet and sells mainly ready meals, sandwiches, pre-packaged salads and other food-to-go. (The Daily Mail)