Sainsbury’s is set to close between 60 and 70 Argos stores as it adds more of the catalogue shop’s outlets to its own stores.
Around 80 new Argos outlets will open within the supermarkets, which will take the place of the stores that are being closed down.
The move comes as a result of a predicted profit dip for Argos. A trading update from the UK’s second largest supermarket warned that profit would dip for the six months leading up to 21 September.
£50 million dip in profit
Poor weather and high marketing costs were listed as factors that contributed to the £50m drop in profit compared to the same period last year.
In a move that echoes Tesco earlier this year, Sainbury’s will also cease to sell new mortgages in a bid to make its financial services division more profitable. Tesco sold its entire mortgage portfolio to Lloyds and exited the market in May.
Sainsbury's reported sales for the three months to 21 September (for stores open at least a year and excluding fuel) dropped 0.2 per cent.
The firm will open 110 new convenience stores and close 30 to 40, it said.
Argos suffered as sales of toys and video games fell, while products from Sainsbury's, including the Tu clothing line, did well.
However, a fall in Sainsbury’s pension deficit means it will cut its contributions by £50m.
Sainsbury’s chief executive Mike Coupe said, “We have focused on reducing prices on every day food and grocery products and expanding our range of value brands, which have been very popular with customers.
"At the same time, we are investing significantly in our supermarkets."