Sainsbury’s Digital Transformation Continues

John Ibbotson

John Ibbotson / 4th July 2017

Sainsbury’s latest figures are a far cry from the last. Last quarter the resent acquisition of Argos was helping the retailer limp through, now they are on an equal footing.

“It’s not far short of a Lazarus moment. No longer leaning precariously on the Argos crutch, Sainsbury’s core business is back on its feet and growing food sales at a healthy clip.

“These results are the first to blur the progress of the two brands since last year’s acquisition – but Sainsbury’s no longer needs to hide behind Argos’s success.

“The 3% growth in grocery sales is an impressive return to form for a brand which for years had dodged the bloodletting unleashed at the cheaper end of the market by the arrival of the discounters.

“With the Argos brand continuing to fire on all cylinders, Mike Coupe’s acquisition gamble is looking more inspired by the day.

“But this has been no lucky break – the CEO’s turnaround plan was painstakingly drafted and diligently executed. And this strong return to form is a vindication of the strategy and a testament to his vision and courage.

“Sainsbury’s has done all the right things by integrating Argos into the business while simultaneously sticking to its strengths of innovation, quality and convenience in groceries.

“Mike Coupe has no time to rest on his laurels though. Food price inflation has slashed margins, and with consumer prices rising at close to 3% a year and the consumption boom waning, retailers have to fight harder for every sale.

“Yet for now the integrated model is delivering in spades. Argos is no longer a ‘get out of jail’ for the struggling Sainsbury’s brand, but an equal partner in a truly impressive double act.”

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