Argos reported a pre-tax loss of £223.2 million for the year ending 1 March 2025, marking a sharp decline from the £37.3 million profit posted the previous year. The retailer, owned by Sainsbury’s since 2016, cited a drop in sales across key categories and the impact of a challenging general merchandise market.
Revenue fell from £4.22 billion to £4.13 billion, reflecting subdued consumer demand and increased competition. Online traffic also declined significantly in the first half of the financial year, while seasonal sales were weakened by a cooler and wetter summer, according to the company’s newly filed accounts.
As part of a restructuring programme aimed at simplifying its operating model and cutting costs, Argos reduced its workforce by more than 2,000 employees, bringing headcount down from 12,000 to 9,800.
Despite the difficult start, the company said trading improved in the second half of the year. Online visits rebounded, and heavy promotional activity helped the retailer return to year-on-year growth in the fourth quarter.
Argos also reported an underlying pre-tax loss of £73 million, driven in part by thinner margins as the company increased promotional offers to stimulate sales in a competitive market.
A statement from the board highlighted the retailer’s focus on encouraging customers to shop more frequently and increase basket sizes: “Following a slow start to the financial year and within a general merchandise market that remains highly competitive, our focus is on encouraging customers to shop with us more often and with bigger baskets. We are driving change in our digital and commercial proposition and have made good progress strengthening the Argos offer.”
The financial update comes shortly after Sainsbury’s confirmed it had held talks with Chinese e-commerce giant JD.com regarding a potential sale of Argos. JD.com, China’s largest retailer with more than 600 million active customers, had been exploring a move into European omnichannel retail. The discussions were abandoned the following day without an agreement.
Analysts say Argos’ results highlight ongoing challenges in the UK retail sector, including shifting consumer habits, price competition, and the costs of running an extensive online and physical network. The retailer’s performance reflects broader pressures faced by general merchandise sellers, as shoppers increasingly turn to online marketplaces and discount outlets.
As Argos moves forward, the company is seeking to strengthen its digital offering and enhance its product mix to drive growth and improve profitability. The retailer’s ability to adapt to changing consumer behaviour and maintain competitive pricing will be critical as it navigates an increasingly difficult trading environment.
