Troubled times at Argos: the catalogue retailer has posted like-for-like sales down 8.6%. Maybe you’d expect such things from a retailer in the current climate. Yet Terry Duddy, chief executive of parent company Home Retail Group, says its directors are scrambling to figure out ‘what the hell is happening’. Isn’t it pretty clear?
The City’s certainly got a good idea: the share price is tumbling, and there’s pressure to shed some of its 754 stores. Analysts now expect profits of £150m for the year – down from £376m in 2007, this after sales fell nearly 10% in the first quarter too. But Duddy is standing firm: market research tells him the strategy’s right, it’s just the economy that’s tanked, with working-class families having to struggle with rising food and fuel bills.
That may be the case, but of course the management still has to do something about it. Argos’ answer is to plot the same course, while pushing its TV channel, which boasts an entire set built from the chain’s own catalogue, and the likes of Coleen Rooney peddling ‘Chanel-inspired’ jewellery. It’s broadcast on Sky channel 642. We’re wondering whether you have to write that number on a paper slip with a tiny pen, and go up to the desk and wait 20 minutes for it to switch on.
The problem facing Argos is clearly that of a market that’s shifting structurally. Look at the encroachment of the major supermarkets, for example. Also, in the age of the internet, the idea of standing in a shop, flipping through a catalogue and lugging a 50" telly home is as counter-intuitive as communicating an important message by scrawling it on paper and feeding it into a clunky fax machine.
So is TV the answer? It’s certainly worked for QVC, whose UK arm reported sales of nearly £400m last year. And the medium does suit anyone trying to flog a product with loads of features – those with a fondness for lurking around the unexplored reaches of the Sky box may well be sold on the idea of a flash telly if they see someone with a suitably dubious tan demonstrating its features.
Argos is at least covering all bases – physical stores, online (which now accounts for about a third of sales) and round-the-clock phone lines. We're not sure how many orders are being placed for Ben 10 duvet sets over the blower at 4am, but you can't argue with the effort.
And its bosses maintain they’re doing the right thing, even if the figures say they’re not. We’re sure it’ll all come out in the wash during what’s sure to be a very tough Christmas. And now we can watch from the comfort of our own homes…