Sainsbury’s & Argos: Evolution, Strategy & What’s Next (UK 2025)
Introduction 💡
Sainsbury’s — one of the UK’s largest supermarket chains — bought Argos in 2016. Since then, the relationship between these two has been a key part of Sainsbury’s strategy to transform from purely food retail into a broader “general merchandise + convenience” business.
But in 2025, things are shifting again: cost pressures, changing consumer behaviour, digital transformation, and recent talks of selling Argos are putting this story in the spotlight. This article unpacks how Sainsbury’s and Argos have worked together, what’s going well, what’s not, and what may happen next.
History & Integration
- Acquisition (2016): Sainsbury’s acquired Home Retail Group for about £1.1–1.4bn, which included Argos and Habitat. This gave Sainsbury’s access to Argos’s strong non-food catalogue, logistics footprint, and extensive network of stores/collection points. Reuters+2London South East+2
- Store footprint changes: Over time, Sainsbury’s has been closing many standalone Argos stores, integrating Argos outlets into Sainsbury’s supermarkets, and increasing Argos collection points. InternetRetailing+2London South East+2
- Operational streamlining: They’ve worked to reduce costs, simplify stock, improve logistics, and bring more digital / click-and-collect capabilities into the fold. corporate.sainsburys.co.uk+1
Current Strategy: “More Argos, More Often” & “Next Level”
Sainsbury’s has recently been executing under a strategy called “Next Level”, with one core pillar being “More Argos, More Often”. Key elements include:
- Making Argos more convenient and valuable for customers by improving range, digital capability, loyalty (using Nectar360), and collection / delivery services. corporate.sainsburys.co.uk+2InternetRetailing+2
- Reducing costs: closing standalone stores, rightsizing depots, consolidating operations, using better stock forecasting, and reducing Argos’s fixed cost-to-serve. corporate.sainsburys.co.uk+1
- Improving customer experience: app improvements, simplification of collection points, better stock availability. corporate.sainsburys.co.uk+1
Challenges & Recent Performance
- Profit Decline / Non-Food Sales Weakness: Argos has been underperforming in general merchandise / non-food, impacted by cost of living, consumer caution, weather (hurting outdoor/garden/seasonal sales), lower demand for big-ticket items. The Standard+1
- Jobs & Depots at Risk: Several depots are slated for closure; roles are at risk as Sainsbury’s aims to streamline logistics and reduce overlap. BBC+1
- Standalone Stores Being Reduced: More Argos presence in Sainsbury’s stores vs standalone units; the latter being closed over time. InternetRetailing+2London South East+2
Recent Big News: Sale Talks
- As of mid-September 2025, Sainsbury’s is in discussions to sell Argos to Chinese e-commerce giant JD.com. Reuters+2corporate.sainsburys.co.uk+2
- The deal is far from certain. Sainsbury’s says no agreement is reached yet, but the move signals that Argos may be viewed as non-core under current leadership, at least more so than in earlier years. corporate.sainsburys.co.uk+2Reuters+2
What It Means for Customers, Staff & Investors
- For customers: Potential changes in brand positioning, possibly improved digital/logistics if JD.com comes in. Also likely more collection points and integration with Sainsbury’s supermarkets.
- For staff: Modest risk in roles (depots closing, job restructures). Some employees might be transferred or offered different roles. BBC+1
- For investors: Sale of Argos cards portfolio to NewDay (worth ~£720m) and talk of Argos sale suggest Sainsbury’s is focusing more on its core food business. Also shareholder returns being considered. Reuters+2Proactive Investors+2
What to Watch Next 🔍
- Whether the sale to JD.com goes through: If so, what changes JD.com proposes in logistics, pricing, branding.
- How many standalone Argos stores are closed vs incorporated into Sainsbury’s over the next year.
- Performance of Argos in non-food categories, especially during economic downturns.
- Technology improvements: app, click & collect, collection-point convenience, stock availability.
- How Sainsbury’s balances cost reductions with customer service, especially under inflation pressure.
Conclusion 🌟
Sainsbury’s & Argos have been intertwined for nearly a decade now, with Argos giving Sainsbury’s access to non-food and general merchandise, while Sainsbury’s gives Argos reach through its store network. But 2025 seems like a turning point — cost pressures, changing customer habits, and strategic refocusing are pushing Sainsbury’s to decide if Argos remains part of its long-term plan or is better off in another owner’s hands.
Whether the sale happens or not, changes are already underway. For customers, flexibility and digital convenience will likely increase. For staff and stakeholders, efficiency, restructuring, and possibly culture shifts are on the horizon.
