Sainsbury’s plans to bolster Argos' Supplier Direct Fulfilment (SDF) model in categories including furniture, in order to capture more customers in the segment.
FY sales at Sainsbury’s (excluding fuel) for the year ended 1st March 2025 came to £26.6b, up +4.2%, with Argos' FY sales at £4.9b (down -2.7%). However, the retailer saw strong year-end sales momentum, with Argos' sales up +1.9% in Q4.
The group reports retail underlying operating profit of £1036m, up +7.2%, with double-digit growth at Sainsbury’s partially offset by lower profits at Argos.
Following a slow start to the financial year and a significant reduction in online traffic, sales at Argos were behind expectations in H1, particularly in Q1 and the early weeks of Q2, Sainsbury’s reports.
Sales strengthened into H2 as the retailer took action to improve online customer traffic and volume, and Argos returned to sales growth in Q4. Profits declined YoY in both H1 and H2, with actions taken during the year improving the trend in H2.
"Within a general merchandise market that remains highly competitive, our focus is on increasing customers’ consideration of Argos – encouraging them to shop with us more often and with bigger baskets," states the retailer. "To this end, we are driving change in our digital and commercial proposition, and we have made some good progress strengthening the Argos offer. We have also continued to reduce the complexity of the Argos operating model whilst still providing market-leading convenience for customers."
Through its SDF model, the business has introduced more than 4000 new products this year across 150 categories (up +43% YoY), with a total of 13,500 SDF products now available. In the year ahead, the retailer plans to go further to extend the breadth of its range, with plans to add an additional 10,000 SDF products in key categories such as furniture.
Simon Roberts, chief executive of J Sainsbury, says: "We’ve transformed our business over the past four years. We have created a winning combination of value, quality and service that customers love, investing £1b in lowering our prices. More people are choosing Sainsbury’s for their main grocery shop as a result, delivering our highest market share gains in more than a decade. We are committed, above all else, to sustaining the strong competitive position we have built – consistently giving customers the great value they have come to expect from Sainsbury’s – and we expect to continue to outperform the market.
"Our belief in the strength of Sainsbury’s offer has driven our decision to make our largest investment in expanding our store space in over a decade as we open supermarkets in key new locations and extend food space within many of our existing stores. It’s also why we continue to invest in our colleagues, whose dedication will power our Next Level plan. Working together with our suppliers we will continue to deliver for our customers, our shareholders and the communities we serve."
