Argos

Argos

Argos is a catalog retailing operation located in the UK and Ireland, and is now a subsidiary of Sainsbury’s, which is a British supermarket chain. Sainsbury’s bought Argos from its parent company, Home Retail Group, for £1.4 billion in 2016. This new business has become Sainsbury’s Argos with its own CEO.

Argos sells through both physical retail shops (845) with 29 million shop customers annually, and through online stores that have nearly a billion online visitors every year. The company is also franchised overseas.

However, Sainsbury’s has announced that they intend to close Argos shops and integrate them into their large Sainsbury’s supermarkets.

 

Founding and Ownership

Argos was founded in 1972 by Mr. Richard Tompkins, who also created the Green Shield Stamps operation in 1958. The idea for Argos came about when he went on vacation to the Greek city of Argos. This idea was an answer to how people could purchase goods from his Green Shield Gift House with cash instead of savings stamps. The original green shield stamps catalog became Argos starting in 1973.

The first physical shop was opened in Canterbury in 1973. Argos was launched with a bang as thousands of staff were hired, and resulted in bringing £1 million in one week in November of that year.

BAT (British American Tobacco) Industries purchased Argos for £32 million in 1979.

Argos created a brand in 1980 to place within its stores called ‘Elizabeth Duke Jewelry Counter’. By 1982, it was the country’s fourth-largest jewelry retailer. That brand has since been phased out in favor of the new ‘Jewelry and Watches’ brand.

1990 saw the company being divested from BAT Industries, and itself being listed in the London Stock Exchange.

GUS plc (Great Universal Stores) purchased Argos in 1998.

In 2006, Argos became part of Home Retail Group when GUS plc divested itself of those two subsidiaries.

By 2013, Argos shops were so prevalent throughout the country that an estimated 96% of all citizens lived within 10 miles of an Argos branch.

Sainsbury’s acquires Argos from Home Retail Group in September of 2016.

 

Operations

Catalog

Twice per year, Argos publishes its catalog. Current editions of the catalog have more than 1600 pages, which include photos, description, prices, and a catalog item number. Copies that are maintained in the store are ring-bound and the pages are individually laminated. Argos offers price reductions on previous catalog items through the use of seasonal sales flyers.

The process of shopping at Argos involves completing a small order form with the item number. Argos provides red pencils to use in the store for this purpose. The order form is taken to the cashier where the items are paid for. The customer is given a receipt which tells them where they are to wait to receive their purchased items.

There are kiosks located within the store labeled “Quick Pay”, that are available for ordering and payment. Shopping and payment can be done online through the Argos website or mobile phone App. Customers also have the option of having their purchases delivered to their home,

Argos Home is a new branded catalog initiated as a test in the spring of 2006. It was launched in a limited number of stores. That fall, after proving successful, it was implemented in all 200 Argos Extra stores. These catalogs contain only home furnishings and styling tips for the current season.

Argos and Barclays entered into a joint venture arrangement to produce an Argos credit card in August 2006. This arrangement ended in 2012 with Argos entering a new agreement with Vanquis Bank.

A decision was made in 2012, after profits fell significantly, that Argos would close a number of catalog stores in order to focus on promotion of the company’s online shops.

Beginning in 2013, Argos and eBay launched a program where customers making purchases on eBay could pick up their items at any Argos store within the UK.

Argos stores began to implement the placement of digital computers in-store to widen its customer appeal beginning in 2016 following the merger with Sainsbury’s. Additionally, some stores were moved into Sainsbury’s supermarkets that were located nearby.

 

Controversies

Sunday Trading

A political controversy in Scotland arose in July 2002. Argos fired several workers for refusing to work on Sunday. In the UK, this action would have been an illegal action in violation of the Sunday Trading Act of 1994, which gave employees in England and Wales the right refuse to work on Sunday.

However, this act did not extend to employees in Scotland. This event led the legislature to pass the Sunday Working (Scotland) Act of 2003 which extends the legal right of Scottish employees to refuse Sunday work. It should be noted that prior to the passage of this legislation, Argos had retracted its decision to fire the workers and instituted a policy to enforce a Sunday work clause in contracts with Scottish employees.

 

Price Fixing

The Office of Fair Trading accused Argos and Littlewoods Index (a rival retailer) in May 2002 of engaging in the practice of price fixing with products from toy manufacturer Hasbro. In the 2003 decision on this case, Argos was fined £17.28 million.

That fine was reduced to £15 million in 2005 after a mildly successful appeal. Argos and the other companies continued to appeal, this time to the Court of Appeal. Argos’ Terry Duddy, CEO of the company’s parent Home Retail Group plc, gave evidence along with David Snow, Jonathan Ward, Alan Cowley, and Ian Thompson. The court dismissed the appeal and ruled in favor of the Office of Fair Trading in October 2006.

 

Furniture causing skin burns

A BBC Watchdog report In February of 2008, reported skin irritation in a number of consumers, possibly as a result of sofas manufactured in China and sold at Argos and other retailers such as Land of Leather and Walmsleys.

LinkWise, the Chinese manufacturer of the sofas denies any culpability in the incident as a result of their products. Argos was praised by the Watchdog for its voluntary recall of the affected products.

Legal claims against the company in the incident continued, and in 2010 customers won monetary compensation from the company.