This is how many Argos stores Sainsbury’s is closing

Supermarket giant Sainsbury’s acquired retailer Argos in 2016 for £1.4bn and since then the grocer has been integrating Argos stores into its supermarkets.

Sainsbury's supermarket at Colton In Leeds.

The grocer has now said it will close up to another 70 Argos stores as it relocates a further 80 into its supermarkets amid a wider overhaul of its estate over the next five years.

The group also announced it will close up to 15 large supermarkets and as many as 40 convenience stores, but will open around 10 big stores and some 110 convenience outlets.

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Sainsbury's chief executive Mike Coupe.

It said the closures will cut costs by £500m over five years but warned cost-cutting will also impact first-half underlying profits by about £50m, with weather and higher marketing costs also taking their toll.

Details of the store plans came as the group announced a 0.2 per cent fall in like-for-like sales, excluding fuel, over its second quarter to September 21.

Sainsbury’s saw like-for-like sales fall in its second quarter despite “improved” sales momentum across all areas of the business.

The retailer said total retail sales excluding fuel were up 0.1 per cent in the 12 weeks to September 21, 2019. However, like-for-like sales excluding fuel were down 0.2 per cent.

The big four supermarket added that grocery sales had increased by 0.6 per cent. While general merchandise sales declined by 2 per cent and clothing sales increased by 3.3 per cent.

Mike Coupe, CEO of Sainsbury’s, said: “Sales momentum was stronger in all areas and we further improved our performance relative to our competitors, particularly in grocery.

“We have focused on reducing prices on every day food and grocery products and expanding our range of value brands, which have been very popular with customers.

“At the same time, we are investing significantly in our supermarkets, driving consistent improvements to service and availability.

“Argos continued to grow market share in key categories, but sales were impacted by reduced promotional activity and the timing of new product releases in gaming and toys.

“Clothing sales were boosted by clearance activity and strong online growth and Tu continued to grow market share. Financial Services sales were in line with expectations.”

The grocer said it expects first half underlying pre-tax profit to reduce by around £50m year-on-year due to the combined impacts of the phasing of cost savings, unseasonal weather against a strong comparative period last year and higher marketing costs.

However, in the second half Sainsbury’s expects to benefit from the annualisation of last year’s staff wage increase and a normalisation of marketing costs and weather comparatives.

“Therefore, while retail markets remain highly competitive and the consumer outlook remains uncertain, we remain on track to deliver full year 2019/20 underlying profit before tax in line with consensus expectations,” Sainsbury’s said in a statement.