The strategy uses Argos as a base with which to build contemporary, market-leading retail capabilities and a leading customer offer across the many ways customers shop, purchase and obtain goods – including digital (online and mobile), store formats and home delivery. These capabilities and multi-channel offer can be extended to Homebase, Habitat and potential partners to accelerate their competitiveness and achieve long-term growth for Home Retail Group.
The Group strategy is built around five elements of a competitively advantaged and differentiated customer proposition: product choice, digital, convenience, human and financial services.
The scale and strength of our retail brands drives market leadership in general merchandise product categories. Home Retail Group offers over 90,000 products across Argos and Homebase, including a substantial element of exclusive and own-brand lines such as Habitat, and is continually expanding its offer to build credibility, choice and differentiation. We utilise our scale advantage to source products for our customers, enabling us to offer them a broad choice of products at competitive prices.
Retail has seen technology drive a fundamental and permanent shift in the way customers shop. Increasingly customers choose to shop online or on the move through mobile devices. The Group strives to develop digital customer experiences that are intuitive, inspiring and consistent across many devices, and provide information to customers that is helpful in their purchase decision such as an up-to-the-minute view of stocking levels for each product. Multi-channel experiences are core to what we do, and the reason we have an ongoing focus on developing our successful internet and mobile commerce channels.
In a digital world convenience is being redefined to mean the ability for customers to obtain our products at the location and the time they desire. The presence of a local store remains critical for many customers, to meet traditional shopping needs and as locations from which to ‘click & collect’ items previously ordered online. Home delivery options are equally important to customers. Home Retail Group operates a nationwide distribution network across multiple distribution centres and over 1,000 stores. Our logistics network is based on a well-developed infrastructure that allows us to continue to focus on improving the speed at which products can be delivered to our customers, through whichever channel they choose to shop with us.
Our 47,000 colleagues working in stores, home delivery, distribution and contact centres are fundamental to how our customers experience our brands. They are a key factor in building trust with customers, particularly in an increasingly technology-driven environment.
Both Argos and Homebase are supported by an in-house financial services offer. Our Financial Services business offers a range of credit products which make it easy for our customers to buy the products they want, when they want.
Each of our retail brands is pursuing comprehensive strategies to help deliver Home Retail Group’s ambition.
In 2012 Argos announced its five-year Transformation Plan to reinvent itself as a ‘digital retail leader’. This Plan has four principal components:
In 2014 Homebase announced a three-year Productivity Plan with the aim of strengthening the foundation of Homebase store and digital capabilities, and improving its customer propositions. This Plan has three principal components:
We have a strong track record of delivering significant organisational and infrastructure changes which improve the flexibility of our businesses and reduce costs, while maintaining or improving our operational standards. This means we will maintain a lean and flexible cost base through:
The Group has strong operational cash flow characteristics and it has £309m of net cash as at 28 February 2015. In addition, we have a £250m committed borrowing facility which is undrawn and which expires in March 2019. This financial strength will enable us to deliver on the investment plans incorporated in both the Argos Transformation Plan and the Homebase Productivity Plan.
You can read more about our progress in all areas of the Argos and Homebase strategies in the Argos and Homebase business reviews. There are areas of risk and uncertainty associated with our strategy that you can read about in the principal risks and uncertainties section.