Argos scales down catalogue to focus on digital

25/10/2012

Argos is to scale back its iconic catalogue in favour of a focus on online retailer, as the home shopping retailer looks to reverse two years of falling sales. The new initiative will see Argos launch a new digital catalogue by Christmas while the circulation of the print version will be cut as part of an internet push. Stores will be kitted out with internet access and Wi-Fi, with a fast-track collection service and customer service for orders.

Under to new plans, Argos will also close down or relocate 75 stores over the next five years.

Parent company Home Retail Group hopes to grow Argos sales from £3.9 billion to £4.5 billion a year in 2018 in an "ambitious but achievable" overhaul that comes after a period of declining sales.

Argos boss John Walden, who was appointed earlier this year to revitalise the business, said it was unlikely the hard-copy catalogue would be axed altogether, with around 85% of customers having seen it before they buy.

But he admitted the book, which was first launched in 1973, may decline "precipitously" as sales shift online.

The group is also resisting pressure for widespread shop closures, saying it would keep stores "at the centre of what we do".

The news comes after a six-month review of Argos to revive the business.

In half-year results also announced yesterday, Home Retail said underlying earnings at Argos were 3% down at £3.3 million although it saw a return to like-for-like sales growth, up 0.6% in the six months to September 1.

Home Retail wants to broaden the appeal of its Argos chain to a wider customer base, but keep the focus on families.

It plans to trim its 739-strong store estate and move shops onto shorter leases to be able to relocate as part of a plan to use stores as pick-up points for online orders.

Stores will be kitted out with internet access and Wi-Fi, with a fast-track collection service and customer service for orders.

The group will also focus on fewer and "more powerful" brands, such as children's toy range Chad Valley and Habitat - the homewares chain Home Retail bought last year.

Argos will begin trials in January to determine the future format and numbers of the catalogue, testing a smaller version that directs customers online for the latest prices and the full range.
The group prints between 16 and 17 million copies of the catalogue twice a year, which are collected by customers in store.

It has already reduced catalogue numbers by around 18% over the past two years.

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