Why Argos could no longer compete in Ireland
With 34 stores, the loss of Argos to the country's retail sector will be significant. Picture: Larry Cummins
With its decision to leave Ireland Argos joins a growing list of retailers to depart the country's main streets and retail parks.
With 34 stores around the country, the loss to the country's retail sector will be significant and on a par with the departures of Debenhams in the early days of the Covid pandemic.
Considered an icon of retail, long before the arrival of online giants such as Amazon, Argos first began operations in Ireland in 1996 and rapidly expanded around the country. The Argos catalogue, with its thousands of pages of products across electronics, toys, and homeware items, was a household staple.
However, the spread of e-commerce and online shopping meant it had faced significant competition for many years. Supermarket giant Sainsbury's purchased Argos for £1.1bn (€1.26bn) in 2016.
Since then it has brought the two businesses closer together. Many of the standalone Argos outlets have closed, replaced by new stores within existing Sainsbury outlets. Irish visitors to Argos stores would also be struck by a very different look and feel to the outlets on this side of the Irish Sea.
The move seems to have worked. Following a robust Christmas trading period, Sainsbury is forecasting profits this year of £690m (€790m) with Argos' UK revenues up by 4.6% in the last quarter.
This stands in contrast to financial accounts filed in Ireland just before Christmas, showing revenues tumbling by 21.25% to €133.76m in the 12 months to the end of March last year.
Without a supermarket network in Ireland, co-location is not an option and entering the very crowded and highly-competitive supermarket sector would have been a massive challenge for Sainsbury's. Instead, Argos stores continue to operate as standalone entities here, competing side-by-side with other big brands.
When the pandemic struck in early 2020, the company dropped its printed catalogues. The once-iconic catalogue was arguably the item that set the firm apart from other retailers.
While operating a website and home-delivery service, Argos never established a full distribution centre in Ireland. Online orders were mainly fulfilled in the UK and shipped to Ireland in fleets of trucks. In this regard, it is clear why major retailers such as Amazon and IKEA have both set about establishing delivery hubs here in Ireland to service customers directly.
Duncan Graham, managing director of Retail Excellence Ireland, said the decision by Argos emphasises the fragility and the rapidly changing nature of the retail industry in Ireland.
"Retailers are experiencing their toughest time of year now and many are struggling to keep afloat," he said.
"We note that vacant units around the country are not being filled quickly enough, which is a significant concern.
"It is critically important that the Government continue to monitor developments and step in with supports if needed in the lean months ahead.”