Sainsbury’s chief executive Mike Coupe cheered a return to sales growth, days before a deadline on the grocer’s £1.4bn bid for Argos owner Home Retail Group.
Mr Coupe has until 5pm on Friday to decide whether to embark on a career-defining tilt at HRG, along with its rival suitor the South African retailer Steinhoff. The HRG boss John Walden has urged both sides to hurry up - saying the takeover was becoming a distraction - but Sainsbury’s hinted that it would go to the wire with any fresh bid and would be happy to walk away.
The latest questions over HRG came as the supermarket revealed that same-stores sales rose 0.1 per cent in the nine weeks to 12 March - the first like-for-like sales rise since Mr Coupe took over from Justin King in 2014.
Mr Coupe, who is bound by strict takeover rules, refused to say why Sainsbury’s would be the most suitable new owners for Argos, or to comment on the likelihood of a new bid. However, he reiterated that Sainsbury’s would not overpay.
An informal offer of £1.4bn has already been tabled, which analysts suggested could rise after Argos revealed an extra £100m on its balance sheet last week. Mr Coupe said: “We’ll get on and execute perfectly well if we don’t do the deal. I don’t feel any personal pressure.”
Sainsbury’s has been stalking Argos for several years. It revealed in December that it had made serious enquiries about a takeover of its parent company following a trial of 10 Argos concessions in its biggest supermarkets.
HRG sold its other business, Homebase, to Australian outfit Wesfarmers for £340m last month, leaving the path clear for Sainsbury’s to pursue Argos. But Steinhoff – which already has interests on the high street, including New Look and Virgin Active gyms – muscled in with a counter-offer.
Mr Coupe admitted that the sales rise at Sainsbury’s was due to strong internet sales – up 14 per cent in the period and meaning that sales at its 1,200 supermarkets and convenience stores remain in negative territory.
Sainsbury’s welcomed more shoppers to its stores, however, and Mr Coupe said this was partly because of major music releases including Adele’s new album 25 and DVDs such as the latest James Bond film Spectre. Sainsbury’s added that it would continue to phase out multi-buy offers in favour of more discounts on individual products.
