Sainsbury's struggling as Argos sales dwindle

Simon Roberts, Sainsbury's chief executive, has said shoppers had "pulled back" their spending prior to the November budget over concerns about inflation and the cost of living.

Sainsbury's bought Argos for £1.4billion in 2016, after a four-month battle to takeover.

They have over 800 stores nationwide.

Roberts, the boss of the UK's second biggest grocer, said that customers were more hesitant to buy, with many seeking "value for money" in the cost of living crisis.

Read more: US congresswoman threatens to 'sanction Britain' if Starmer bans X over deepfakes

Read more: Trump's White House cage fight forces G7 meeting re-schedule

Sales at Argos dropped 1 per cent during the quarter, and have been blamed on slow sales of higher-ticket items like furniture, as well as a “weak” gaming market.

In the final six weeks of the year, Argos dropped 2.2 per cent.

Argos has long struggled to compete with Chinese retails like Shein and Temu, who undercut the retailer's prices.

Despite this, a Sainsbury’s spokesperson said that the retailer's plans for Argos "continues to make good progress", even "despite a tough and promotional general merchandise market".

Sainsbury's announced in September that they had entered discussions to sell Argos to Chinese e-commerce giant JD.com - however the talks eventually fell through, and the store remained under Sainsbury's control.

Some took the announcement to show Sainsbury's long-term plan to sell on Argos once sales are stable.

Aside from Argos' struggles, Sainsbury's reported total sales for its grocery division increased in the third quarter.

Although still down from the prior quarter, food sales increased by 5.4 per cent over the festive season, with shoppers reaching for healthier fresh food, as well as premium dine in products over the Christmas season.