The Home Retail Group came into existence last autumn after demerging from Great Universal Stores, which was wound up after being in business since 1900. Its shares began trading on the London Stock Exchange as of 11 October 2006 and its operating divisions comprise Argos, a multi-channel retailer of general merchandise, and Homebase, the UK’s second largest home improvement retailer. One of the aims of the de-merger was to provide the business with more flexibility to manage its own resources in order to optimise performance and this has seen it undertake several activities, which are expected to become key drivers of profitable growth.

The two operating companies are now moving towards sharing a common sourcing and logistics infrastructure to try and make delivery of products to customers more efficient. An increasingly joint product pool is also being created to cut purchasing and other operating costs and increase the range of products available to both organisations.

While Homebase is a traditional SAP user, Argos replaced a raft of legacy applications with an Oracle merchandising and supply chain planning system in spring last year. The aim of the move was to be able to replenish stock at stores on a daily rather than a weekly basis, boost the accuracy of forecasting and gain a better understanding of supplier delivery performance.

Argos Direct, the company’s delivery to home arm, has likewise just finished replacing legacy applications at its three distribution centres with new warehouse management software from Manhattan Associates. The project, which included the introduction of radio frequency technology from Psion Teklogix, is intended to reduce administration tasks and improve order accuracy levels.

But the Home Retail Group attributes Argos’ 37 per cent growth in online sales for the year ending March 2007 to the fact that, unlike many rivals, its internet channel is fully supported by its supply chain infrastructure.

As a result, Homebase is now using Argos’ online capability, ordering and home delivery infrastructure to try and boost its own web-based revenues.

The Home Retail Group attributes Argos’ 37 per cent growth in online sales to the fact that its internet channel is fully supported by its supply chain infrastructure