Home Retail Group publishes trading statement covering the 13 weeks from 28 February to 28 May 2016

Milton Keynes, UK, 2016-Jun-09 — /EPR Retail News/ — Home Retail Group, the UK’s leading home and general merchandise retailer, today publishes a trading statement covering the 13 weeks from 28 February to 28 May 2016.

John Walden, Chief Executive of Home Retail Group, commented:

“I am pleased with our performance in the first quarter. Argos delivered good total sales growth together with positive like-for-like growth, representing its strongest sales growth performance in eight quarters.  This was achieved against the challenging backdrop of constrained seasonal product sales due to poor weather, on top of a deflationary pricing environment.

“Many of the digital capabilities we are building, as we pursue the Transformation Plan to reinvent Argos as a digital retail leader, are positively impacting our business. Internet sales grew 16% during the quarter, which is our strongest quarterly digital sales growth for over three years.  Digital sales accounted for almost 50% of total Argos sales in the quarter, including mobile commerce which now represents almost 30% of sales.  Argos’ customer experiences overall improved in the quarter, aided by Fast Track, a market-leading national proposition for both same-day home delivery and store collection.  Fast Track continues to build momentum and is achieving leading levels of customer satisfaction.

“Finally, we remain on track to complete the proposed transaction with Sainsbury’s in the third quarter of this calendar year.  Given the natural distraction that a transaction such as this can be for our colleagues, on top of the recent sale of Homebase, I am particularly pleased with our performance in the quarter.”

Q1
(13 weeks to
28 May 2016)
Argos
Sales £868m
Like-for-like sales change 0.1%
Net space sales change 2.5%
Total sales change 2.6%
Gross margin movement  Down c.100bps

Total sales at Argos grew by 2.6% to £868m.  Net new space contributed 2.5%, mainly as a result of store openings in the previous financial year.  There were two closures of digital concessions within Homebase stores in the quarter, reducing the store estate to 843.  Like-for-like sales increased by 0.1% in the quarter, however the cannibalisation impact from the new space added in the previous financial year was around 1% and therefore Argos’ underlying like-for-like sales increased by approximately 1%.

Sales grew in both electrical and non-electrical product categories during the quarter, with the growth in electricals principally attributable to the performance of TVs, mobiles, computers and tablets, partially offset by a sales decline in white goods.  The growth in sales of non-electrical products was largely driven by furniture and general sports, partially offset by weaker sales of seasonal products.

Internet sales grew by 16% in the quarter and represented 49% of total Argos sales, up from 44% for the same quarter last year.  Within this, mobile commerce sales grew by 17% to represent 29% of total Argos sales, up from 25% in the same quarter last year.

The approximate 100 basis point gross margin decline was principally driven by the anticipated impact of adverse currency and shipping costs and an adverse sales mix impact mainly attributable to the improved performance of margin dilutive electrical products.

Financial Services customer redress

In the course of implementing its new governance and risk management procedures, the Group’s Financial Services division identified that it had erroneously collected excess fees in relation to the late payment of amounts due from certain customers.  The Group took advice on this matter and based upon this advice it booked a charge in its FY16 financial statements.  The Group has subsequently been advised that a more extensive customer redress programme will now be required.  A detailed review exercise will now be undertaken, however a preliminary estimate has been prepared, which indicates that the existing customer redress provision may need to be increased by an amount in the region of £30m.

There will be a conference call for analysts and investors to discuss this statement at 8.30am this morning.  The call can be accessed as a live webcast on the Home Retail Group website www.homeretailgroup.com.  An indexed replay will also be available on the website later in the day.

Disclosure requirements of the City Code on Takeovers and Mergers (the “Code”)

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made, can be found in the Disclosure Table on the Panel’s website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 disclosure

A copy of this announcement will be available on Home Retail Group’s website at www.homeretailgroup.com/investor-centre by no later than 12 noon (London) time on 10 June 2016.

The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Further information
This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Home Retail Group or any of its affiliates in any jurisdiction or an inducement to enter into investment activity.

Information in this announcement is based upon unaudited management accounts.  In addition, certain statements made are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.

Forward looking statements typically include words such as “targets”, “plans”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “estimates”, “projects” or words or terms of similar substance or the negative thereof.  All statements other than statements of historical facts included in this announcement may be forward looking statements. Except as required by law, Home Retail Group undertakes no obligation publicly to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Enquiries:

Analysts and investors (Home Retail Group)
Richard Ashton, Finance Director 01908 600 291
Mark Willis, Director of Investor Relations

Media (RLM Finsbury)
Rollo Head, 020 7251 3801

Argos revolutionises online shopping by becoming the first retailer to offer same-day home delivery across the UK

Milton Keynes, UK, 2015-10-8 — /EPR Retail News/ — Argos is revolutionising online shopping by becoming the first retailer to offer same-day store collection, and same-day home delivery, for nearly 20,000 products across the UK.

The new service is called Fast Track. Customers can see Fast Track items clearly online, purchase them, and choose to either collect them from a local store or schedule a same-day or next-day delivery slot.

Customers choosing Fast Track Collection can collect their products from 800 Argos store locations nationwide, at specially marked Fast Track Collection counters, from Argos colleagues who will have the products in customers’ hands within 60 seconds. Fast Track Collection is free.

Customers choosing Fast Track Delivery can select from four convenient home delivery slots: 7am-10am, 10am-1pm, 2pm-6pm and 7pm-10pm, seven days a week including Sunday. Customers can order by 6pm to have an item delivered by 10pm the same day, or schedule a convenient time on the next day or future days. The delivery fee is only £3.95.

Like the Argos team members serving Fast Track Collection customers in-store, Fast Track Delivery drivers are Argos employees, specially hired and trained and working in local stores around the country.  Argos has created new jobs for 3,300 drivers, who will operate the 800 liveried Argos vans in streets up and down the UK this Christmas season. Up to 1,000 drivers are currently being recruited for the busy upcoming Christmas season.

Fast Track Collection and Fast Track Delivery are possible because of behind the scenes improvements Argos has been making during the past two years to its stocking, distribution and digital systems, such as the ‘hub & spoke’ stocking model it deployed in stores last year.  Fast Track has been in testing for several months and customer reaction to the new home delivery service in particular was very positive.  One customer tweeted: “…the fact that Argos do same day delivery on a Sunday makes me so happy.” Another said she found the service “amazing” when her TV broke at 5pm and she was watching her new one by 8.30pm the same day.

John Walden, Chief Executive, Home Retail Group (parent company of Argos) said: “As customers increasingly shop from online and mobile shopping channels, they are increasingly sensitive to the speed and cost of obtaining their products.  Argos has always been known for convenience, and is uniquely positioned with its national network of stores and distribution centres to provide customers with the best options to fulfil their digital orders.  We are pleased to introduce Fast Track Collection and Fast Track Delivery, which represents the fastest, cheapest and most convenient way for customers to purchase their goods online.  We hope Fast Track will help UK consumers this Christmas and make their seasonal shopping speedier and easier than ever before.”

Bryan Roberts, Senior Vice-President & Knowledge officer for EMEA at Kantar Retail, said:

“Delivery has emerged as one of the key battlegrounds for UK retailers, as customers increasingly look for multiple delivery slots that allow them to shop how and when they want on the same day.  In terms of customers being able to order online as late as 6pm and receive products on their doorstep that evening, Argos is showing its rivals a clean pair of heels with this new speedy nationwide service.  While having the right offer at the right price will be as crucial as ever this Christmas, there will also be a sprint finish on the nation’s roads to deliver the goods the same or next day.”

Interested applicants for customer fulfilment drivers or seasonal jobs in Argos stores should apply as soon as possible at www.argoscareers.com

Argos was the first to launch click & collect 15 years ago and prior to that led the way with a UK-wide home delivery service in 1999.

-ENDS-

Notes to Editors

For more information or images, please contact media.relations@argos.co.uk or call 0845 120 4365.

Additional images and driver case studies are available on request.

About Argos
Argos is a leading UK digital retailer, offering around 50,000 products through www.argos.co.uk, its growing mobile channels, stores and over the telephone.

Argos continues to be the UK’s largest high street retailer online with around 121m customer transactions a year through its stores and over 900 million website and app visits in the 12 months to February 2015.  Customers can take advantage of Argos’ convenient Check & Reserve service available through its network of 800 stores across the UK and Republic of Ireland.

In the financial year to February 2015, Argos sales were £4.1 billion and it employed some 29,000 people across the business.

###

PR PHOTO. Free Editorial Use. Argos Launch NEW Same Day Delivery Service.

PR PHOTO. Free Editorial Use.
Argos Launch NEW Same Day Delivery Service.

Home Retail Group CEO on Q2 results: Argos improved sales; Homebase performed well across its peak trading season

Milton Keynes, UK, 2015-9-11 — /EPR Retail News/ — Home Retail Group, the UK’s leading home and general merchandise retailer, today updates on the trading of its second financial quarter, covering the 13 weeks to 29 August 2015.

John Walden, Chief Executive of Home Retail Group, commented:

“Argos delivered an improved sales performance in the second quarter. It made good progress with new stores, opening more than 50 digital concessions within Homebase and Sainsbury’s, which have generated encouraging early results. Consistent with our previous guidance, Argos’ sales continued to be adversely impacted by the performance of a number of key electrical product categories as well as weaker overall market conditions in August.

“Homebase performed well across its peak trading season, delivering good like-for-like sales growth in both quarters of the first half, while continuing its progress on both its store closure programme and the Productivity Plan more broadly.

“The outcome for the Group’s full-year generally depends upon the important Christmas trading period at Argos which, this year, seems less predictable than usual due to a less certain promotional environment. Our teams have made solid progress preparing for this period, including substantially completing the technology and operational steps necessary to introduce new store collection and home delivery propositions to our customers. We will be making increased marketing and promotional investments to launch these propositions and we expect customers to increasingly embrace them over time.”

 

Q1
(13 weeks to
30 May
2015)
Q2
(13 weeks to
29 August
2015)
H1
(26 weeks to
29 August
2015)
Argos
Sales £846m £897m £1,743m
Like-for-like sales change (3.9%) (2.8%) (3.4%)
Net space sales change 1.3% 2.4% 1.9%
Total sales change (2.6%) (0.4%) (1.5%)
Gross margin movement  Up c. 50bps Up c. 125bps Up c. 100bps
Homebase
Sales £438m £378m £816m
Like-for-like sales change 5.4% 5.9% 5.6%
Net space sales change (7.0%) (8.7%) (7.8%)
Total sales change (1.6%) (2.8%) (2.2%)
Gross margin movement Down c. 175bps Down c. 75bps Down c. 125bps

 

Argos
Total sales at Argos declined by 0.4% to £897m. Net new space contributed 2.4% with the store portfolio increasing by 52 stores to 840. This increase comprised 44 digital concessions within Homebase and eight digital concessions within Sainsbury’s.

Like-for-like sales declined by 2.8% in the quarter. As anticipated, sales of electrical products continued to decline principally driven by TVs, tablets and white goods. These declines more than offset a good performance in toys.

Internet sales for the quarter represented 46% of total Argos sales, up from 44% for the same period last year. Within this, mobile commerce sales grew by 11% to represent 25% of total Argos sales, up from 22% in the prior year.

The approximate 125 basis point gross margin improvement was principally driven by the anticipated impact of favourable currency and shipping costs, together with the continued timing benefit of a small number of other positive items which are expected to reverse in the second half of the current financial year. These increases were partially offset by an increased level of promotional sales.

Homebase

Total sales at Homebase declined by 2.8% to £378m as a result of the ongoing store closure programme, which resulted in eight store closures in the quarter and which reduced the store portfolio to 271. Closed space reduced sales by 8.7% in the quarter.

Like-for-like sales increased by 5.9% in the quarter with sales growth broadly across all product categories, but particularly in big ticket products. This growth continued to be partially supported by both the trade transfer and the stock clearance sales benefits attributable to the previously announced store closure programme and distribution centre closure.

The approximate 75 basis point gross margin decline was principally driven by the adverse impact of the previously announced stock clearance activity together with an adverse sales mix impact, mainly attributable to the growth in margin dilutive big ticket products. These declines were partially offset by a reduced level of promotional activity together with the anticipated impact of favourable currency and shipping costs.

There will be a conference call for analysts and investors to discuss this statement at 8.00am this morning. The call can be accessed as a live webcast on the Home Retail Group website  www.homeretailgroup.com. An indexed replay will also be available on the website later in the day.

Home Retail Group will announce its half-year results on Wednesday 21 October 2015. A Trading Statement covering the 18 weeks from 30 August 2015 to 2 January 2016 will be announced on Thursday 14 January 2016.

Information in this announcement is based upon unaudited management accounts. In addition, certain statements made are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.

Enquiries:

Analysts and investors (Home Retail Group)
Richard Ashton, Finance Director 01908 600 291
Mark Willis, Director of Investor Relations

Media (RLM Finsbury)
Rollo Head, 020 7251 3801

Argos supports the Great British High Street Competition as it calls for a digital high streets “revolution”

Argos calls for digital high street “revolution” as it backs Great British High Street Competition

Milton Keynes, UK, 2015-8-4— /EPR Retail News/ — Today Argos became the latest heavyweight brand to support the Great British High Street Competition as John Walden, Chief Executive of Home Retail Group plc, owner of Argos, called for a digital high streets “revolution”.

The government supported Digital High Street 2020 Report found that local businesses and independent traders are declining in competitiveness by not keeping up with the digitally savvy modern shopper and availing themselves of digital technologies.

The Great British High Street Competition will seek out the best high streets across the country and showcase how effectively they are capitalising on digital to help their high streets thrive. This year’s £80,000 prize pot also includes specialist digital training by Google for a hundred high street retailers in each of the seven award categories.

High Streets Minister Marcus Jones is pleased that Argos has joined the other retail giants supporting this year’s competition.

Speaking at Argos’s flagship store in Victoria where he saw the Argos ‘Digital Hub’ in operation, Marcus Jones said:

“Last year’s competition was a massive success, helping to showcase the very best high streets, how they were innovating, and the brilliant local people behind their story. And winning not only put a spring in local people’s step, but it also resulted in a tangible economic impact with retailers reporting increased footfall.

“This year’s Great British High Streets Competition is going to be even bigger and better with a boosted prize pot and expert digital advice to help our winning high streets not only be good physical businesses but digital businesses too.

“That’s why it’s great to see another high street stalwart in Argos get behind the Great British High Street Competition and I hope that with their support we’ll get even more entries this year.”

Home Retail Group Chief Executive John Walden said:

“We take great pride in our Argos stores being at the centre of hundreds of Britain’s best high streets. That’s why we want to recognise the great work that goes on by people across the country to make their local high street so special.

“But a great high street must also be a great digital high street. We need a revolution across our communities in their understanding and embracing of digital technologies so that they can grasp the exciting opportunities of a digital future.

“The Great British High Street Competition will help high streets learn from one another and I’m delighted to say that Argos stores will be encouraging as many people as possible to get voting and help their town to victory.”

Argos joins Boots, Costa, Google, M&S and the Post Office, and as one of the patrons of the competition, pledging to use in-store promotion to get as many people as possible voting online for their best loved high street.

The competition, now in its second year, celebrates the hard work of local groups across the country and their efforts to support their local high streets and make them ever better places to shop and socialise.

The first Great British High Street competition last year saw 135 communities battle it out to be crowned the nation’s best. Belper in Derbyshire emerged as the overall winner.

A concerted focus on our high streets has led to a revival across much of the UK with the latest figures showing that retail sales increased by 4.2 per cent in June 2015 compared to June 2014. This is the 27th consecutive month of year-on-year growth and the longest period of sustained growth since May 2008.

Notes to editors:

The Great British High Street Competition celebrates the hard work of local people across the country in turning their high streets into even better places to shop and socialise. Now in its second year the nationwide competition is free to enter, with prize winners in each of the seven categories receiving expert advice and mentoring alongside a share of the £80,000 prize pot.

For more information or to enter your high street visit http://thegreatbritishhighstreet.co.uk/. Deadlines for applications are 1 September 2015. Winners will be announced in November 2015.

For media enquiries about the Great British High Street competition contact Rhod Jones on 030 3444 1143 or rhodri.jones@communities.gsi.gov.uk

###

Home Retail Group appoints Echo Lu as Managing Director for Homebase

Milton Keynes, UK, 2015-3-20 — /EPR Retail News/ — Home Retail Group has announced the appointment of Echo Lu as Managing Director for Homebase, one of the UK’s leading home enhancement retailers. Echo has significant experience in retailing both in the UK and Asia, and will take up her new position on 20th April.

Echo joins Homebase from Tesco where she worked over the past ten years across different markets and a broad range of functions.  Her most recent roles were as Group Business Planning & Insight Director and Property Director for Tesco UK & Ireland, she was also a member of the UK Board. Prior to these roles, Echo held a number of roles in Tesco’s Asian business, including Chief Operating Officer for China, Operations Director, East China, and Commercial Buying for Grocery.

Her career commenced at Bristol-Myers Squibb where she held a number of roles, culminating as HR Director for China. Echo graduated in International Economy & Finance at Fudan University.

John Walden, Home Retail Group Chief Executive, said:

“Echo has significant, broad-based retail experience both in the UK and the rapidly evolving Asian region, and importantly has been an agent for positive change throughout her career.  She is the ideal candidate to lead Homebase and its Productivity Plan, as we improve the store operational standards and customer service, develop stronger customer propositions and accelerate Homebase’s digital capabilities, and realise its potential for greater growth.”

Echo Lu said: “I am delighted to join Home Retail Group and to lead the Homebase business.  Homebase is a strong UK brand with an ambitious plan in the short-term to strengthen its foundations and exciting longer-term growth opportunities.  I look forward to working with John, his executive team, the Homebase leadership team and the 18,000 Homebase colleagues to build a stronger business for the future.”

-ENDS-

Editor’s notes:

Media contacts:
Chris Wermann, Corporate Affairs Director 07718 327 107
Rollo Head, Finsbury  020 7251 3801

Photo available at the Home Retail Group media centre. http://homeretailgroup.pressarea.com/imagelibrary 

Echo Lu: Curriculum Vitae

Tesco:  2004-2014
Group Business Planning & Insight Director
Property Director, UK & Ireland
Chief Operations Officer, China
Operations Director, East China
Chief Executive Officer Development Programme
Human Resources Director, Asia

Bristol-Myers Squibb  1997-2004
Human Resources Director, China
Other Human Resources leadership roles

Education
MS. Industrial Relations & Human Resources – West Virginia University
BA. International Economy & Finance -Fudan University

About Homebase
Homebase is a leading home enhancement retailer with around 60 million transactions a year, selling around 38,000 products for the home and garden. It has 304 large, out-of-town stores throughout the UK and Republic of Ireland and a growing internet offering at www.homebase.co.uk. In the financial year to February 2014, Homebase sales were £1.5 billion and it employed some 18,000 people across the business.

Homebase is part of Home Retail Group, the UK’s leading home and general merchandise retailer.

###

Home Retail Group appoints Echo Lu as Managing Director for Homebase

Home Retail Group appoints Echo Lu as Managing Director for Homebase

Digital High Street Advisory Board formed by industry leaders unveiled five-year strategy to reinvigorate the UK’s traditional High Streets

Milton Keynes, UK, 2015-3-10 — /EPR Retail News/ — Industry leaders*, organised as the Digital High Street Advisory Board, today announced a five-year strategy to reinvigorate the UK’s traditional High Streets and proposed the adoption of four major inter-dependent digital initiatives by 2020:

  • Targets for town centre infrastructure and connectivity for 2020 and beyond, including broadband, mobile and WiFi.
  • Goal to eliminate the gap in basic digital skills by 2020 for individuals, small businesses and charities via regionally coordinated programmes.
  • Centralised High Street Digital Lab to provide the UK’s 1,200 towns and their High Street businesses with ready-to-use digital capabilities and dedicated town-by-town digital skills training, leveraging a network of digital apprenticeships for every UK town centre in the UK.
  • The first UK High Street Digital Health Index, an interactive benchmark for towns and local authorities to drive assessment and change across the key measures of digital health – infrastructure, basic digital skills, High Street attraction and digital engagement.

The Digital High Street 2020 Report addresses how stakeholders in town centre communities, including small businesses, public service providers and charities, can benefit from integrating traditional High Streets with digital technologies, and compete more favourably to serve customers as they embrace proliferating digital alternatives.  It observes that although a “digital divide” is growing between those national and international firms investing aggressively in digital capabilities, and the many small, independent High Street proprietors, the groups are interdependent and success of those across the divide is critical to the success of our communities.

The Report also reinforces the importance of the digital economy to driving the economic and social vibrancy of High Streets, which stand to generate billions of pounds of additional revenue from digital interactions with the public.  The Report suggests a framework to accelerate their capabilities through private, public and third-sector collaborations and leadership from local authorities.

John Walden, Chief Executive of Home Retail Group**, and Chairman of The Digital High Street Advisory Board, said: “The digital revolution is arguably the most disruptive factor affecting our communities, but its effects are not often considered central to high street revitalisation.  Many members of UK town centres are struggling to keep up with consumers in terms of their digital capabilities, and given the pace of digital growth many towns lack sufficient infrastructure and basic digital skills.  I believe that the business-oriented Board has provided recommendations that, taken together, can restore our High Streets to vibrancy in a digital future, into 2020 and beyond.”

High Street needs to change to remain viable.  24/7 “always on” internet ‘window shopping’ has changed shopping forever.  The range of goods, pricing comparisons and home delivery can appear more attractive to consumers, while ease of parking and lack of congestion can make out of town retail parks appear attractive when compared to what could be the intrinsic benefits of many High Streets.   New solutions in retailing, logistics and traffic management are required to enable towns and cities to regenerate their High Streets to cope, take advantage of technological changes and provide solutions that mix virtual and physical in new ways, offering genuinely new and attractive shopping experiences.

With 60% of adults using a mobile phone or tablet to access the internet on the go, digital transformation of high streets would generate significant social and economic value for our communities around the country.   High streets are worth investing in with more than £150bn of retail sales influenced by digital, but retailers with services that fail to meet customers’ expectations risk losing over £12bn sales a year.  Only half of small businesses (SMEs) and charities have a website and just 33% of SMEs currently transact online, as 31% of all such organisations lack basic online skills.  Recent estimates show that digital technology could unlock £18.8 billion of revenue for SMEs, while reducing their costs by up to 20% and increasing customer satisfaction and retention.   The estimated annual social and economic value of digital inclusion for a new users going online is £1,064, rising to £3,568 for a more advanced individual or small business user.

Digital High Street Advisory Board 2020, recommendations:

Town centres need to significantly raise infrastructure and connectivity standards for 2020, by developing sufficient digital access through infrastructure beyond existing Government targets for 2017, including; i) universal fixed connectivity of not less than 24 Mbps, with 75% of the UK’s residences and businesses having access to fixed broadband speeds of 100 Mbps, ii) high speed mobile data coverage with 4G available, from multiple operators, to 98% of the population across both indoor and outdoor geographies, and iii) clear public access WiFi standards, for consumer experiences to ensure non-disruptive handoffs as consumers move among venues and providers and to encourage broader deployment.

Basic Digital Skills programme to be developed to eliminate the current gap in digital skills in our communities by 2020, to ensure that all digitally capable residents of our communities – individuals, SMEs and the voluntary, community and social enterprise sectors have basic digital skills.  Go ON UK*** to coordinate the management, funding and implementation of digital skills priorities as a holistic programme, with a range of public and private delivery partners.

The first High Street Digital Lab will provide the UK’s 1,200 towns and their businesses with digital capabilities from a central not-for-profit organisation. This will include the aggregation of generally available technologies, digital applications, tools, methods and training programmes, in order to provide a platform for digital consumer services for each community across the UK on behalf of its local authority, high street businesses and charities. Services will be in the form of a separate marketplace, or portal, for each community, launched and operated by the Lab through a local team of digital apprentices, leveraging TheGreatBritishHighStreet.co.uk as an external consumer brand.

In a first for the UK, a Digital High Street Health Index will enable towns, national and local authorities to i) assess the competitiveness of a particular local high street community or high streets generally, ii) understand the key measures of economic value creation from digital developments, and iii) inspire local authorities, town teams and private enterprises to make positive change.

Peter Fitzgerald, Director, Google UK said:

“Today, the vast majority of UK shoppers research online before they buy from a store. This means that every business is a digital business because every consumer is a digital consumer. We hope that this report will be a first step towards improving digital access and expertise among small businesses and help them grow faster and reach more customers.”

Ben Dowd, Business Director at O2 said:

“Over the next five years, we will continue to see digital technology redefining how consumers, businesses and public services interact. The Digital High Street Health Index will be a unique and critically essential part of enabling towns and villages to understand how they can put technology at the heart of their community, so that local customers and citizens can truly benefit.  Crucially, they must work with retailers to ensure they understand how technology can complement – not replace – their physical presence, as those that fail to take an integrated approach risk being left behind.“

Baroness Lane-Fox, Chair Go ON UK said:

“Lloyds Business Digital Index research has shown that 31% of organisations in the UK are lacking Basic Digital Skills. This means they could be missing out on a range of benefits, such as taking payments or donations online, or having access to a wider range of services and suppliers. Lowering this figure represents huge value both socially and economically for the UK. The proposed digital apprentices will proactively help these organisations to realise the value of being digitally skilled, and potentially help them generate more revenue from customers and donors.”

Helen Dickinson, Director General of the British Retail Consortium said:

“British high streets have weathered sweeping changes in society, economic cycles, property development and retail expansion, and the seismic impact of digital technology on communications, entertainment and commerce. Our communities have survived these changes to varying degrees but while what makes a successful high street has not fundamentally changed, the ability to achieve wider future success is now absolutely dependent on embracing the impact of digital and the recommendations of this report provide a strategy to do just that.”

-ends-

NOTES TO EDITORS:

For a copy of the full report and the appendices please go to:  www.thegreatbritishhighstreet.co.uk

High Street video and photography also held at:  www.thegreatbritishhighstreet.co.uk

For media enquiries please ring:

Home Retail Group:        0845 120 4365

The Digital High Street Advisory Board was established in April 2014 to further the work of the Future High Street Forum, including representation from private business, public sector and trade bodies.*  Its aims were to establish a clear strategy for delivering and future-proofing a successful

combination of ongoing new digital technologies with legacy bricks and mortar high streets and to ensure solutions are commercially viable and consumer relevant.

Under the direction of the Government’s Department of Communities and Local Government, the Future High Street Forum was formed in 2013 to bring together leaders across retail, property and business to better understand the competition town centres across the country face and to drive forward new ideas and policies.

*Board members:

John Walden, Chief Executive, Home Retail Group and Chair of the Board.

BT, Facebook, Google, Hammersons, IBM, John Lewis, Lloyds Bank, M&S, Post Office, Sainsbury’s, Telefonica, Tesco, Westfield.

** Home Retail Group is the UK’s leading home and general merchandise retailer with sales of around £5.7 billion in the financial year to February 2014. We sell products under three distinct and complementary retail brands – Argos, Homebase and Habitat. The Group employs some 47,000 people across the business. For more information visit www.homeretailgroup.com

*** Go ON UK is an agile cross-sector digital skills charity established by Baroness Lane-Fox in 2012. Go ON UK is a partnership organisation and has the chief executives of nine major organisations around its boardroom table – Age UK, Argos, BBC, Big Lottery Fund, E.ON, EE, Lloyds Bank, Post Office and TalkTalk. Working with its partners, Go ON UK’s vision is to empower everyone in the UK to reach their digital potential.

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Argos and Sainsbury’s team to open 10 new Argos digital stores within existing Sainsbury’s supermarkets

LONDON, 2015-1-30 — /EPR Retail News/ — Argos, the UK’s leading general merchandise retailer and Sainsbury’s, the UK’s second largest grocer, have teamed up to open 10 new Argos digital stores within existing Sainsbury’s supermarkets. This will bring extra choice and convenience to Sainsbury’s and Argos’ customers who will have access to the combined ranges in the convenience of a Sainsbury’s supermarket.

These new format Argos digital stores will provide customers with a choice of over 20,000 non-grocery products which they can either buy instantly in store via tablets, or reserve online for easy collection within hours, the same or the following day. An extended range of around 40,000 products can also be ordered in store for home delivery. The Argos digital stores in Sainsbury’s will range in size from around 1,000 to over 5,000 square feet.

The combination of Argos digital stores and Sainsbury’s supermarkets will create a compelling and complementary product offer and provide the convenience that customers are increasingly looking for from their local supermarket. The 10 digital stores will open by summer this year.

Mike Coupe, Chief Executive of Sainsbury’s, said: “These 10 Argos stores will complement our supermarket offer, giving customers the opportunity to shop for an extended range of non-food items. They will bring something new and different to our customers, and fit well with our strategy of making our supermarkets more convenient. As well as looking at carefully selected partners, we continue to roll out our ranges of own brand clothing and general merchandise in our supermarkets to give customers even more choice and value.”

John Walden, Chief Executive of Home Retail Group, said: “Our new distribution model allows us to provide customers in any Argos location with a choice of around 20,000 lines within hours, regardless of the size or stocking capacity of the store. This strategic capability has opened up options for a variety of new Argos stores and formats, and the possibility that we can now cost-effectively reach more customers and neighbourhoods with an Argos presence. I look forward to the results of the 10 store programme with Sainsbury’s and to understanding the full potential of this exciting opportunity.”

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Argos and Sainsbury’s team to open 10 new Argos digital stores within existing Sainsbury’s supermarkets

Argos and Sainsbury’s team to open 10 new Argos digital stores within existing Sainsbury’s supermarkets

Home Retail Group updates on the trading of its second financial quarter covering the 13 weeks to 30 August 2014

Milton Keynes, UK, 2014-9-11 — /EPR Retail News/ — Home Retail Group, the UK’s leading home and general merchandise retailer, today updates on the trading of its second financial quarter covering the 13 weeks to 30 August 2014.

John Walden, Chief Executive of Home Retail Group, commented:

“The Group has had a good first half. Argos delivered its ninth consecutive quarter of positive like-for-like sales growth in the second quarter.  For the first time in many years, this sales growth was supported by an improved gross margin performance.

“Homebase performed well over its peak trading period, following up its good performance in the first quarter with broadly flat like-for-like sales in the second quarter. This is especially pleasing given that we achieved this against a strong 11% like-for-like in the same period last year.

“At this halfway point of the financial year we expect to deliver full-year Group benchmark profit in line with current market expectations, however, as always the full-year outcome will depend upon Argos’ Christmas trading period.

“We remain cautiously optimistic about the broader economic environment. Key economic indicators seem to be improving, however retail spending in general has been inconsistent across both product categories and geographies, suggesting that there is not yet a sustainable, broad-based consumer recovery.”

 

Q1

Q2

H1

(13 weeks to
31 May 2014)
(13 weeks to
30 August
2014)
(26 weeks to
30 August
2014)

ARGOS

Sales £868m £901m £1,769m
Like-for-like sales change 4.9% 1.2% 2.9%
Net space sales change (0.1%) 0.2% 0.1%
Total sales change 4.8% 1.4% 3.0%
Gross margin movement Down c.25bps Up c.25bps c.0bps

HOMEBASE

Sales £445m £390m £835m
Like-for-like sales change 7.9% 0.1% 4.1%
Net space sales change (2.4%) (2.9%) (2.6%)
Total sales change 5.5% (2.8%) 1.5%
Gross margin movement Down c.50bps Down c.75bps Down c.75bps

 

 

 

 

 

 

 

 

 

 

 

 

ARGOS

Total sales at Argos grew by 1.4% to £901m. Net new space contributed 0.2% as we added a net 13 stores in the quarter as part of previously announced trials, including nine Argos concessions within Homebase stores and four small format stores. The Argos portfolio now comprises 747 stores.

Like-for-like sales increased by 1.2% in the quarter. Growth was driven by increased sales of electrical products as a whole, principally as a result of strong sales performances in TVs, video gaming and white goods, partially offset by a further decline in tablets. These increased sales more than offset small sales declines in furniture, homewares and jewellery.

Sales via the internet grew in line with total sales in the quarter and represented 44% of total Argos sales. Within this, mobile commerce grew by 36% and represented 22% of total Argos sales.

The approximate 25 basis point gross margin improvement was driven by a reduced level of promotional sales together with a number of other small positive items, partially offset by an adverse sales mix impact from the growth in margin dilutive electrical products.

HOMEBASE

Total sales at Homebase declined by 2.8% to £390m due principally to a reduction in net space of 2.9% as a result of a net six store closures in the quarter, which results in a total of seven closures in the first half. The Homebase portfolio has therefore reduced to 316 stores.

Like-for-like sales increased by 0.1% in the quarter. There was growth in sales of big ticket products, offset by a decline in sales of seasonal products following the very strong performance in this category in the same period last year. Sales in the remaining product categories were slightly up.

The approximate 75 basis point gross margin reduction was driven by the adverse impact of stock clearance activity in respect of the store closures, together with an adverse sales mix impact from the growth in margin dilutive big ticket products.

OTHER

A cash payment of £33.4m was made to the Home Retail Group Employee Share Trust during the period to fund the purchase of 18.8m shares. The shares are in addition to those already held by the Trust and are needed to satisfy obligations arising from employee share schemes. A cumulative payment of £50.0m to fund the purchase of 26.8m shares has been made in the current financial year.

No other material events, transactions or impacts on the Group’s financial position have taken place since the previously announced 1 March 2014 balance sheet date.

 

There will be a conference call for analysts and investors to discuss this statement at 7.30am this morning.  The call can be listened to live on the Home Retail Group website www.homeretailgroup.com. An indexed replay will also be available on the website later in the day.

Home Retail Group will announce its half-year results on Wednesday 22 October 2014. An Interim Management Statement covering the 18 weeks from 31 August 2014 to 3 January 2015 will be announced on Thursday 15 January 2015.

 

To view the announcement in PDF, click here.

To listen to the conference call, click here.

Information in this announcement is based upon unaudited management accounts. In addition, certain statements made are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.

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