Sainsbury's Scraps JD.com Argos Sale Talks Over Disagreement on Terms

British supermarket giant Sainsbury's announced on Sunday that it has concluded discussions with Chinese e-commerce behemoth JD.com regarding the potential sale of its general merchandise retailer, Argos. Sainsbury's stated that JD.com communicated a willingness to engage only on a "materially revised set of terms and commitments," which the British retailer deemed not to be in the best interests of its shareholders, employees, and broader stakeholders. This termination of high-profile talks comes just a day after Sainsbury's had publicly confirmed the ongoing negotiations.

Despite the cessation of these sale discussions, Sainsbury's reiterated its financial projections, maintaining its forecast for a retail underlying operating profit of approximately £1 billion ($1.36 billion) for the 2025–2026 financial year. When approached for comment on the matter, JD.com declined to provide a statement.

The consideration of an Argos sale aligned with Sainsbury's strategic pivot under CEO Simon Roberts, who assumed leadership in 2020 with a renewed focus on the company's core food business. The supermarket group, Britain's second-largest trailing only Tesco, had on Saturday confirmed it was in preliminary talks with JD.com for the potential divestiture of Argos.

Acquired by Sainsbury's in 2016 for £1.1 billion, Argos holds a significant position in the UK retail landscape. It stands as Britain's second-largest general merchandise retailer, boasts the country's third most-visited retail website, and operates an extensive network of over 1,100 collection points nationwide.

Following the termination of talks, Sainsbury's underscored its commitment to enhancing Argos's performance. The company reported that Argos traded in line with expectations over the summer period, aided by favorable weather conditions. Sainsbury's affirmed its intention to implement "focused action to extend range, enhance digital capabilities and improve relevance to grow frequency and spend in Argos," signaling a clear strategy for the retailer's continued development within the group.

Sainsbury's, listed in London, currently holds a market valuation of £7.05 billion ($9.56 billion), while Hong Kong-listed JD.com commands a market capitalisation of HK$418.76 billion ($53.82 billion), according to LSEG data. This episode follows a series of strategic divestments by Sainsbury's, including the sale of its Sainsbury's Bank's travel money business to Fexco Group in July. Last year saw further streamlining with the disposal of Sainsbury's Bank's personal loan, credit card, and retail deposit portfolios to NatWest Group, its cash machines business to NoteMachine, and the Argos Financial Services cards portfolio to NewDay Group.