Catalogue conglomerates Argos have been forced to re-evaluate their marketing strategy as prices drop and consumer confidence nosedives. Are they simply the latest in a host of retailers having to up their game or is this a case of another one bites the dust?
The chain, owned by the Home Retail Group, are now earmarking their wow deals for preferential treatment,bulking up their value range and adopted the new company strap line “Helping you live for less” in an all out attempt to increase consumer spending.
Instead of their usual reduction notifications on re included product lines, a huge number of new items are to be reclassified as wow deals in their latest catalogue, out this weekend.
Figures from the British Retail Consortium (BRC) state that retail spending in London alone has dropped by 0.7% on this time last year.
An Argos spokeswomen said, “As always, our catalogue prices will be competitive. Our aim would be to hold initial prices where relevant and to adjust other prices to the market where necessary during the life of the catalogue.”
Argos have seen their sales dip over the Christmas period. Like for like sales fell by 7.5 per cent during the third quarter. Although consumer electronics has seen a positive growth, other categories such as toys, jewellery, furniture and home wares had much worse.
The company pride themselves on competitive pricing and value for money; their typical reductions have ranged from between 2 and 4 per cent during the past year. At the same time, the number of their Wow deals has increased from 179 - 300 in the past year. The number of Argos value items (their bargain basement range) has also increased from 150 - 230.
Should we worry that another British retail institution is heading for the scrappers yard? Similar things have and are happening across the whole of the retail sector. Woolworths couldn’t handle it, Zavvi bit the dust, never mind Adams, and the Officers Club, all of whom went to that big high street in the sky.
It may have been a great time to bag a bargain but the January sales have given us all a skewed version of how much we can get for our cash and with Argos having to resort to tactile pricing in such an aggressive manner, we can bet promotions like their wow deals will mushroom over the whole of the retail sector, as we’re persuaded to reach into our pockets and pay up.
It’s pretty simple economics, there is only so far a company can drop their prices and still cover their costs. Let’s hope our beloved Argos doesn’t join its less successful retail peers who couldn’t quite keep up.
