Sainsbury’s to join forces with Home Retail Group?

A move by Sainsbury’s that could change the ecosystem of home retail and non food delivery has been rebuffed by Home Retail Group, owner of Argos and Homebase. The grocery giant had made the offer over the New Year.

After being rebuffed, Sainsbury’s put out a statement saying, “there can be no certainty that this will result in a formal offer, nor as to the terms of any such offer”. The statement continued, “Over the last year, Sainsbury‘s has been working in partnership with Home Retail Group trialling a number of Argos concessions in Sainsbury‘s stores. The Board of Sainsbury’s believes the combination of Sainsbury‘s and Home Retail Group is an attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation,”

The offer was meant to be, “an opportunity to bring together two of the UK’s leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition.”

The deal would, “bring together multi-channel capabilities and delivery networks for fast, flexible and reliable delivery to store or to home across a wide range of food and non-food products”.

The move would create a retail giant that would compete with the likes of Amazon in the UK, having the sort of might in the country that could make for a very competitive business across grocery, home improvement and the DIY sectors. Together, the Sainsbury’s / Home Retail Group would cover many of the same markets as Amazon and would create stiff competition in a market dominated by the giant and a disparate group of small businesses. This story will continue and will be covered as it develops by Apex Insight in the coming weeks. In addition, Argos has good links with eBay and eBay could go head to head with Amazon. In UK e-commerce terms it would be an earthquake.

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