Two become one… it’s the Friday Blog!

Published on: 29th July 2016

The proposed acquisition of Argos by Sainsbury’s is gathering steam. The deal has now been given the go ahead by the Competition and Markets Authority, while Home Retail Group shareholders have also given their seal of approval to the bid this week. So it seems we won’t have to wait long to see how the merging of the two operations will pan out. According to well-placed sources, the takeover is likely to be completed on or around September 1st. Interestingly, there are conflicting rumours emanating from the Milton Keynes area as to what happens next: I’ve heard that some believe any significant changes are likely to be some way off, while some others have suggested that immediate redundancies will take place, possibly running into the hundreds. We shall see….

There is also speculation about the future of the Argos catalogue. Around seven million catalogues are currently printed each year, although this year the retailer is apparently running a trial at 23 stores by not supplying them with catalogues. One local press story I saw online this week focused on an irate shopper in Wrexham who was told to go to Chester to collect a copy, which doesn’t exactly seem an ideal customer service initiative from where I’m sitting. However, the big question remains that if the catalogue is indeed phased out, how will Argos / Sainsbury’s replace the profit derived from the contributions that suppliers make for their products to be featured in the book? Somehow I doubt it will be straightforward to convince suppliers to contribute similar sums without having a catalogue presence to justify the (vast) expense.

I’ve spoken previously in the Blog about suppliers forward-buying currency prior to the Brexit vote, but of course the same applies to retailers: I’m hearing that while some did, others did not and it has been suggested that some of those unfortunate souls may be prevailing on suppliers to ‘help them out’. Given the fact that suppliers have their own challenges to face, I suspect few will feel in a position to be overly generous on that count, leaving the likelihood of significantly reduced margins for those retailers to play around with. As a result, I wonder what effect this will have on pre-Christmas retail promotions.

For example, Argos ran a ‘3 for 2’ promotion this week, as predicted in last week’s Blog. Interestingly, however, it only lasted for a few days (four or five I believe?) – I’m not 100% sure, but it feels like it may have been the shortest-ever major toy promotion. If I’m wrong on either count I’m sure someone will let me know, but I guess it’s possible that the events of the past month led to a truncated event to protect margin. I can just imagine the reaction of consumers who saw the ad last weekend arriving in-store on Wednesday to find that the sale was already over…

On to lighter matters, the new Premier League football season is only a matter of weeks away, and we’ll once again be running the Toy World Masters Fantasy Football League. If you’d like to pit your wits against industry friends and colleagues, the league code is 2058-4789 and you can join the game here. There will also be a shout out for the best team name, with Little Concepts’ Phil Nelson an early front runner with ‘Lallanas in Pyjamas’, impressive for containing both a football and toy/licensing-related pun.

Last night saw the Light Fund Treasure Hunt take place in London – never mind Pokemon Go, I was amazed a few members of the licensing community didn’t come a cropper as they wandered around the west end staring at maps and trying to find clues, oblivious of traffic and other hazards. But everyone seemed to make it back to base in one piece and the licensing industry’s charity is a step closer to its goal of hitting the £1 million fundraising goal, which will be a fantastic achievement.

Finally, I couldn’t pass up the chance to take one final opportunity to highlight the hubris of Sir Philip Greed, described by MPs this week as the unacceptable face of capitalism, which he promptly proved by spending money suing one of the MPs who had investigated his behaviour, rather than using that money to help reduce the mountainous BHS pension deficit which he largely created. This picture was taken by a photographer called James Walters for the Guardian a while back, and sadly they declined to print it. But as it is now freely available on twitter, I thought it would be a shame for it not to reach a wider audience…