I’ll win over the snobs by making Argos faster than Amazon

The proof? Buckingham Palace is ordering from us now, says firm’s boss

FOR those who associate Argos with cheap jewellery and cut-price electronics it might come as a surprise, but Buckingham Palace is one of its best customers.

New boss John Rogers, who took the helm after the store chain was bought by Sainsbury’s in a £1.3bn deal last year, is keen to dispel its downmarket image.

The store in Camden High Street in London, he says, delivers frequently to Buckingham Palace and the Houses of Parliament. So what does Her Majesty order? Toasters, Tupperware, one of the sovereign rings for which Argos is famed? And does a footman come to thumb through the catalogue? ‘ I can’t say whether it is actually the Queen,’ he says. ‘They order online.’

His discretion is admirable, but what about those deliveries to Westminster – are MPs putting some cheeky Argos purchases on expenses?

‘I don’t know,’ he laughs. ‘The challenge delivering to both those places is security; that can be onerous. In London there are a lot of celebrities who are customers. I can’t say who they are but some are very famous. Some are famous for being famous,’ he adds, with an air of mystery. ‘The point is we are now stocking upmarket brands such as Apple and Bose, so the snobbery is starting to go away.’

Whether we admit to it or not, 70pc of the population shops in Argos at least once a year.

Rogers’ domain includes not only Argos, but also the non-food divisions of Sainsbury’s. The two combined have turnover of £6bn a year, making it probably the biggest fashion and general merchandise retailer in Britain. So he has a retail empire that could pack a punch. But as the demise of BHS shows, life is not easy for the likes of Argos, the once muchloved high street favourites that have let themselves slide into drabness.

How can the jovial Rogers, previously the finance chief at Sainsbury’s, persuade customers to shop at Argos when they could go to Amazon for convenience and value, to John Lewis for top-notch service, to AO for white goods – the list goes on.

He says the attraction of Argos is that it is often quicker than Amazon. It can offer fast-track delivery so customers can order from 20,000 items and have them delivered within four hours for £3.95. He adds: ‘We are very competitive on price. If you compare us with some department stores, we will be cheaper. And we are convenient. If you order by 6pm your goods will be with you by 10pm in 90pc of the country. With Amazon you can’t get same-day delivery in 90pc of the UK.’

THE secret is what he calls its ‘ hub and spoke’ system. This means that hubs at larger stores such as Camden act as warehouses for smaller ones nearby – the spokes. Because Argos has hundreds of stores all over Britain, it has outlets closer to more customers, in contrast with Amazon that has only a dozen warehouses in the UK.

That will enable him to beat Amazon at its own game, because he will be able to make super-quick deliveries to many more customers.

‘We can offer fast-track delivery in a very tight time window right across the country, not just in a select few urban areas like the competition,’ he says.

Following the deal with Sainsbury’s, Argos concessions will be opened in larger stores. The idea is that customers will use the supermarket outlets to collect deliveries, and possibly buy a few groceries while they are there. By the same token, people picking up some cat food might be tempted into Argos to buy a telly or an Xbox.

There will also be seven mini-Habitat outlets in Sainsbury’s stores by the middle of next year, as the supermarket acquired the once ultra-trendy furniture brand as part of the takeover. ‘Our strategy is to be there whenever and wherever customers want us,’ he says.

Rogers, 48, is very charming and approachable, but behind the jolly exterior there is a core of obsession about Argos that may well propel him to be the next chief executive of Sainsbury’s. Many in the City tip him as the successor to Mike Coupe, the current boss of the supermarket chain.

One point in Rogers’ favour is that he’s frighteningly intelligent – quite literally a rocket scientist, who started his career as a missile designer with BAe Systems.

He works gruellingly long hours, frequently with a 5am start, followed by touring stores with a gimlet eye for any shortcomings, then meetings before admin in the evenings.

It’s too soon to say whether Rogers’ hard work will bear fruit, but early signs are that it is paying off. In the key Christmas period over the 15 weeks to January 7, sales at Argos were up 4pc, compared with a static performance at new parent J Sainsbury. ‘We were very pleased with the performance but not surprised,’ Rogers says. He carried out no fewer than 14 dry runs for Black Friday weekend, the beginning of the Christmas shopping spree, and visited 40 stores in the week running up to the big day.

Rogers is also looking at expanding Sainsbury’s Tu fashion range. ‘The clothing is only in about 120 stores, so it is a hidden gem. We can grow that business online, and combine it with Argos fast-track delivery, so if you have a party dress emergency we could solve it.’

This is all very different from the dowdy old days of Argos, when customers would leaf through a dogeared catalogue, fill in a paper slip with a broken-tipped biro someone else had chewed, hand it over the counter and wait for the item to arrive about 20 minutes later. The décor was grey, the atmosphere evocative of east Germany in 1983.

The catalogues are still there, though the pages are now embossed in plastic so they look much smarter. Most customers are using the ‘browsers’, which look like tablet computers, to order their goods.

ROGERS tries to show me how slick the operation is, but is tripped up as it takes him three goes to spell Peppa Pig properly. ‘It just shows my kids have grown up,’ he says.

Despite the automation, customers are very attached to the catalogue, which was launched in 1973 with more than 20m copies printed at its peak. Argos tried removing it from some stores, but sales fell so it was reinstated. ‘The catalogue is great for browsing if you don’t know exactly what you want,’ says Rogers.

Argos currently has 840 stores and has opened 30 new outlets of a planned 250 in Sainsbury’s, which has 1,500 shops nationwide. Rogers expects to hire about 1,000 people on top of the 30,000 already working at Argos.

The stakes are high. Supermarkets are struggling in an economy where incomes have stagnated and discount chains such as Aldi and Lidl are all the rage. Sainsbury’s purchase of Argos was an attempt to establish a heavyweight online operation that pits it against Amazon, which is storming into online groceries with its Fresh service.

The supermarket group is planning to invest about £135m in Argos over the next three years. Rogers has a big incentive to make it work if he is to prove the City pundits right and take over from Mike Coupe. Is that his next big opportunity? ‘I really have to get my head down. UK retailing is incredibly difficult,’ he says. ‘If I don’t make this a success, there might not be a next opportunity.’