I was one of the sceptics who questioned last autumn’s acquisition of the Argos catalogue and online home appliances by supermarket major Sainsbury’s.
Many of the Argos concessions are within Sainsbury’s stores, the former business had been under some pressure before it was snapped up, and I wondered whether, when people are doing their food and clothing shop, they are really in the mood to queue for an egg whisk or laptop.
However, the proof of the pudding is in the eating. Argos under the aegis of its new owner is doing rather well rather early.
Sainsbury’s has revealed that its like-for-like group sales rose 1 per cent in the trading quarter to 7 January, including the important festive period. But it gives a somewhat false picture, with Argos adding plenty of ballast to the performance of its new owner.
Sainsbury’s like-for-like sales rose a pale 0.1 per cent, while Argos’ sales jumped 4 per cent. Group chief executive Mike Coupe, who masterminded the acquisition, has earned the early credibility to say the new acquisition has been a good judgment.
One quarter is not definitive, but many bosses after such a strategic move would be given slack by the City for several quarters of indifferent performance of a new subsidiary on the basis it needed to bed in. Coupe doesn’t need that excuse and the firming share price for Sainsbury’s yesterday reflected that.
As most industry experts believe the supermarket industry will remain tough for at least this year amid a slowing economy and reduced consumer spending power, it will be interesting to see if Argos continues to be a mitigating diversification. So far, so good.
I tweet, therefore I am
It could be president-elect Donald Trump’s deepest credo. Bank of England governor Mark Carney tells MPs that the BoE has someone monitoring Mr Trump’s profund attachment to social media for any remarks that might move financial markets.
Crazy, post-truth world, but it seems prudent given Mr Trump’s devotion to Twitter and his shoot-from-the-lip style. The governor also told Treasury select committee chairman Andrew Tyrie that the Bank monitored his Twitter account. It’s almost a form of etiquette.