Home Retail Group’s two main arms, Argos and Homebase, have had differing levels of success over the last couple of years. Argos has seen consumer shopping habits bring its particular style of retail outlet back into fashion, and subsequently helped prop up the less successful Homebase arm.
What had previously been deemed one of Argos’ weaknesses, its high-street stores, could become one of its main advantages. Online shoppers have begun to split into two distinct demographics, click and deliver and click and collect. The click and deliver service needs to utilize the facilities of the Royal Mail or UPS, alternatively have its own extensive delivery infrastructure. The click and collect shoppers want the convenience of buying online without having to traipse around a shop, with more immediate access to their purchases rather than waiting for it to be delivered. This has been highlighted by the initial agreement that Argos has struck with online retailer eBay. Effectively allowing eBay to hold goods at the company’s stores for collection.
Trends have formed and reformed quickly with online shopping, but judging by the increases seen on an annual basis from a number of businesses reporting online sales as their fastest area of growth, this is something that is set to grow in the coming years.
Having posted better-than-expected full-year figures, investor expectation is high and the quiet period of the last month has seen shares drift back down to just below 190p level. The shares are not in oversold territory but are at the low end of the range, and the 200-day moving average has offered the shares some sort of support. Assuming it can keep closing above the 188p level, we would expect some sort of bounce ahead its Q1 figures released on Thursday 13 June.