Delivery Wars: Argos Makes Move on Amazon

Argos has moved to tackle the might of Amazon by starting a same-day home delivery service UK-wide - for a fee.

The retailer is using its network of 840 UK stores, alongside its delivery centres, to fulfil its offering from Wednesday - having hired 3,300 drivers to run a fleet of 800 vans.

Argos said its seven-day Fast Track service was aimed at "revolutionising online shopping" in the run-up to the industry's busiest time of the year, Christmas.

A total of 20,000 of the retailer's 50,000 products were available under the scheme, which will cost users a flat delivery fee of £3.95 regardless of how much is spent.

Customers can choose from four delivery slots to receive their goods.

It (Other OTC: ITGL - news) marks a major investment in Argos by parent firm Home Retail Group, which would not comment on how much it had spent.

Over the past two-and-a-half years, Argos has shifted its focus online - away from its traditional in-store catalogue business - but while its same-day delivery promise is not unique, its nationwide promise is.

It claimed it would cover 95% of the UK, with only the most remote villages and islands unable to take up the same-day service.

The vast majority of the same-day delivery services offered by major retailers in the UK currently are only available in the biggest towns and cities.

Argos' biggest competitor, Amazon, is more restricted in its UK coverage because its deliveries operate out of eight 'fulfilment' centres.

Amazon Prime members can get a one-hour, same-day delivery in London, Birmingham and some surrounding areas for £6.99 or select a free two-hour, same-day delivery slot.

The Fast Track service will place greater pressure on margins at Argos, which achieved profits of £129.2m in its last financial year on sales of £4.1bn.

Amazon, which says it does not make a profit in the UK, had sales of £5.3bn in comparison.

A report by HSBC in the same period last year estimated that supermarkets made a loss of £17 for each online order they fulfil.

Speaking on the investment, Home Retail (Other OTC: HMRLF - news) chief executive John Walden said: "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."

Argos said while deliveries would be available as late as Christmas Eve, slots would be available on a first-come-first-served basis only.