Argos To Open Digital Stores In Sainsbury's

Argos has stepped up its digital transformation by confirming plans for 10 concession outlets within Sainsbury's stores.

The retailer, which makes products from electronics to garden furniture, and the supermarket chain see the partnership as an opportunity to boost customer numbers, convenience and choice for shoppers, despite both offering general merchandise (GM (NYSE: GM - news) ) including TVs.

The 10 Argos stores, to be open by the summer, would be spread across the UK.

The partnership offers Argos a low-cost expansion as it moves away from catalogues towards e-commerce while Sainsbury's will hope for new customer growth despite the new in-store competition for its own GM offering.

The supermarket, like its major rivals, is under pressure to protect and grow its market share amid growing business for hard discounters such as Aldi and Lidl.

It is currently the second largest chain in the UK, with Asda close behind, and recently announced job cuts to save cash after its worst Christmas sales performance for a decade.

Sainsbury's told Sky News that Argos was one of 30 in-store concessions it had signed - the other brands including Jessops and Timpsons.

The joint (NasdaqCM: JYNT - news) statement said: "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."

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."

John Walden, the chief executive of Home Retail Group, which owns Argos, said: "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."