Blackfriar: Recollecting a painful collection experience at Argos

Argos is aimed at less wealthy shoppers – the typical customer earns less than the UK average wage of £26,000.

Blackfriar went to Argos once on December 24, 2010.

The date is etched on the brain because the experience was memorable and not in a good way. In fact it was never to be repeated.

Having been barged out of the way several times, and queue-jumped by people Blackfriar thought safer not to confront, the decision was made to never return.

Yet Argos does actually sell some decent stuff. Blackfriar was bought a rather fine candlestick from there and was surprised to discover its origins.

So the news that Argos is to shut down or relocate 10 per cent of its stores as it switches its focus to internet sales makes good sense at first sight.

Argos has been hit hard by the recession as its lower income earners have suffered more than wealthier consumers.

At the same time it faces fierce competition from value-driven supermarkets like Leeds-based Asda and online rivals such as Amazon. Argos’ parent company Home Retail, which also owns the Homebase home improvement chain, reported an underlying pre-tax profit of £18m for the six months to September 1, down from £28.3m last year.

Profits at Argos were flat at £3.3m and at Homebase they fell 18 per cent to £24.5m.

The plan by parent company Home Retail is to close or relocate 75 stores, with 60 expected to be shut down and 15 relocated.

Circulation of the traditional Argos catalogue, which was launched nearly 40 years ago, will be reduced and it will be adapted to support the digital offer, but will not be scrapped.

Terry Duddy, chief executive of Home Retail Group, predicted the catalogue will be around “in some form or other” at the end of the five-year plan.

Argos boss John Walden said it would be “foolish” to pull the catalogue now, with around 85 per cent of customers viewing the catalogue before they buy.

He added that the group would keep stores “at the centre of what we do”.

So, in future, stores will be used to collect goods that have been ordered online or through mobile devices.

But this is where the problem lies.

When Blackfriar visited Argos on Christmas Eve two years ago, it was to collect an order for Lego that had been made online.

You have to tap in your reservation number at a ‘quick pay kiosk’ and pay for the item. Then you have to queue up again for the item to come up from the warehouse.

So unless Argos is planning to improve the collection system, chances are it will still be a grim experience.

Blackfriar isn’t going to chance it.

Bank of England governor Sir Mervyn King was in a thespian mood when he took to the stage at Cardiff’s Millennium Centre this week.

But while his language was colourful, his assessment of Britain’s fortunes was bleak: China, India and Brazil’s meteoric growth is slowing and Europe remains a basket case.

“Ours may be a sceptred isle, with its own currency and control of monetary policy, but we cannot insulate ourselves from these events,” said the outgoing central banker. “So this precious stone set in the silver sea seems more like a storm-tossed vessel.”

With the candour and freedom of a man whose leaving date is set – June 30, 2013 – he demolished hopes that a solid recovery is underway.

Today’s first estimate of third-quarter GDP is likely to show Britain climbing out of recession, but Sir Mervyn was clear – Britain is merely zig-zagging out of recession.

Much of his speech was dominated by the monetary tools the BoE has used in an effort to relieve the pain of the downturn.

It has spent £375bn of newly-created money on buying Government gilt under its unprecedented quantitative easing (QE) programme.

But with QE’s effect waning, it is now using the State’s perceived status as a relatively safe haven for investors to offer cheap loans to banks.

His underlying message was that more pain must come, and without central banks, the banking system would be in an even bigger mess.

Crucially, he said, banks still need to recapitalise.

“Just as in 2008, there is a deep reluctance to admit the extent of the undercapitalisation of the banking system in many parts of the industrialised world,” he said.

Let this be food for thought for Britain’s big banks, about to report third-quarter earnings over the next week or so.

Bigger dividends may appease their frustrated shareholders, while generous bonuses could dissuade top bankers jumping ship to hedge funds, but now is a time to retain capital, not squander it.