Argos: it’s Sainsbury’s very own Blu Blu

Outlook

The supermarket would benefit from Argos’ logistics business (Getty Images)

If your children are young enough, you may have come across Blu Blu the Baby Dolphin. It’s an appallingly large cuddly toy which our daughter decided she just had to have. As she had been given sufficient money by her relatives to buy one herself, we reluctantly concluded we couldn’t halt the purchase. It was her money, after all.

What on earth is the point of my writing this? It’s because Argos is Sainsbury’s Blu Blu. It’s the post-Christmas gift the grocer’s management have decided they just have to have. Like Blu Blu (which it sells), Argos is a major cause of headaches. They’re just suffered by its investors rather than parents. But Sainsbury’s bosses are immune to them. They just see the cuddly, fun part, as was evident from Wednesday’s belated sales pitch, extolling the virtues of a deal.

There’s more crossover between the customer bases of the two firms than you might think. The chain is convinced it can sell more to both sets of customers by bolting Argos on as a click and collect hub and making better use of its space.

But, unlike my daughter, Sainsbury’s doesn’t have the money. It has to ask its shareholders. Will they let it buy Blu Blu? Well, sales were better than expected and the business is in good heart. Perhaps Sainsbury’s deserves a treat. It’s just that there’s no taking Argos back to the store if it isn’t working properly after a few months. And Argos-owner Home Retail Group doesn’t seem minded to agree a special offer price. Even though it probably should.