Sainsbury's says it is considering its next steps but believes Home Retail Group is a good fit based on both companies' reputation in their respective markets. "The combination is an opportunity to bring together two of the UK's leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition," it added in a statement.
Since May 2015, Argos has operated a number of smaller pick-up outlets inside Sainsbury's stores, offering customers up to 20,000 items for instant purchase or later collection. It was seen as a way to put pressure on Amazon and other online retailers that don't have a large physical presence in the UK.
With Amazon continually expanding its grocery delivery options, Sainsbury's must now ready itself to take on the world's biggest online retailer. By picking up Home Retail Group, it hopes to "create a food and non-food retailer of choice for customers" that has stores in all the right locations, a wide range of products and a speedy delivery network.
It makes a good case, but Home Retail Group has (so far) refused to budge. Sainsbury's now has until February 2nd to decide whether to make another offer or keep on going it alone.