Sainsbury and the argonauts….

Actually it should be J.Sainsburys and Argos, but it does not scan so well.

This is the recent financial story of Sainsburys (one of the U.K. Leading grocery outlets, for those non UK readers) is stalking the Home Retail Group. The main interest is Argos, the on street, online operation supplying  mainly electrical and household goods. 

I haven’t a clue as to what the future direction of grocery multiples should be. And I have no more idea as to the direction of the future of the likes of Argos. But what I do know is that Sainsburys are undergoing a tough time and are struggling to redefine themselves, and Argos, whilst achieving some online success, are struggling with their own identity, and profitability.

Now, apparently the rational for this merger, is that Sainsburys are looking at developing their online and logistical operations, taking on the likes of Amazon. Well excuse me for being naive but that ‘…ain’t going to happen…‘. Nor, with my  extremely naive, retail analysts dunces cap on, is the merger of two organisations, both with sets of different sets of problems,likely to succeed.

The riddle does not stop here. Sainsburys started the Homebase chain and sold it off, when deciding it was not part of their core business. The Home Retail Group, current owner is selling it off to an Australian DIY group. All the main grocery retailers have stated  that they need to concentrate on their core business ie food. So why is Sainsburys going in another direction ? Is it because Amazon are increasing their food offering ? Whatever the motive there is now another suitor, the parent company of Benson Beds, the mind boggles.

Well, what has this to do with the party industry? More than you think . Argos is a portal for eBay, and a number of online party suppliers are using said portal. The parent company of Benson Beds, is called Steinhoff International, a South African operation with 6,500 retail outlets, selling furniture, household goods and general merchandise. All of a sudden it suddenly becomes more interesting…

As to where this all goes ? Who knows? But it is worth keeping an eye on it as at sometime or another it will impact on our market place in some way . I know which suitor I would prefer, if it is going to happen and doesn’t sound like a German beer…

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