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S T UDE NT I N F O R MA T I O N P A C K

Updated 1/04/05


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MISSION STATEMENT….

“We provide our customers with the best value for money through the most convenient shopping experience”

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abcd CONTENTS…. GENERAL INFORMATION….

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WHAT’S IN THE NAME….

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ARGOS STORES AND THEIR LOCATIONS….

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OFFERING CONVENIENCE….

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ARGOS VISION….

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SUPPLY CHAIN….

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MARKETING….

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ZAK & PAM….

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CUSTOMER SERVICES….

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ARGOS AND THE MEDIA….

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INFORMATION TECHNOLOGY & E COMMERCE….

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ARGOS EMPLOYEES & HUMAN RESOURCES….

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THE FUTURE….

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abcd GENERAL INFORMATION…. Argos was launched in 1973 when the first 17 stores opened simultaneously on July 21. Since then the company has become one of the most powerful forces in British retailing with over 590 stores throughout the UK and Ireland. Over 160 of these are Argos Extra stores, and more conversions are planned for the future. Argos has grown through the development of a simple idea that combines the comfort and convenience of home selection via the catalogue with the immediacy of high street stores. One of Argos’ fundamental strengths is the cost superiority of catalogue shopping over other forms of retailing, which enables the company to offer a wide range of merchandise at competitive prices. Although run as an independent business, Argos is owned by GUS plc, a retail and business services group. GUS provides information and customer relationship management services through Experian, general merchandise through Argos Retail Group (ARG) and luxury goods though a majority shareholding in Burberry Group plc. ARG was formed in 2000 to build on GUS’ long experience in the home shopping market and the strengths of the Argos brand. ARG is made up of Argos, Homebase, Wehkamp and ARG Financial Services.

Facts

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Argos is Europe’s leading catalogue store chain and third in the world Argos was the winner of the Multi Retail Week Awards and Store Manager of the Year 2005 Multi Channel Retailer of the Year at the 2004 Argos today is the UK’s largest retailer of toys and small electrical appliances and number two in personal care. 70% of UK households have shopped with Argos in the last year and have an Argos catalogue Argos currently employs around 24,000 full time employees When the first Argos catalogue was launched it featured 7,000 different products. The catalogue now contains more than 13,000 in the traditional catalogue and c17,000 in the Extra catalogue The majority of the Argos stores have been refurbished to the ‘Brighter Shopping’ format argos.co.uk was the highest ranked European online retailer of 2003

The Catalogue There are two catalogues launched each year supported with promotional flyers: • Autumn/Winter catalogue is published July/August • Spring/Summer catalogue is published January/February • Flyers are published to coincide with special events through out the year such as Valentine’s Day, Mother’s Day and Easter • There are a wide range of brands available in the catalogue including Sony, Panasonic, Hitachi, Mattel, Adidas, Nike, Nokia, Motorola, T Mobile, Virgin and many more

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abcd WHAT’S IN THE NAME…. According to the Collins Dictionary, “argosy” was ‘a large abundantly laden merchant ship, or fleet of such ships’. Students of Greek mythology may recall Jason, who sailed out in the ‘Argos’ in search of the treasured Golden Fleece. The name ‘Argos’, from the Greek translation ‘swift’, as befitting a catalogue store chain, was picked from a list of suggested names for the organisation by Richard Tomkins, the company’s founder, and the company began trading under the name in 1973. The now familiar red Argos logo, seen above 590 + stores, is the company’s registered trademark, and is now so well established and recognised that it is unlikely to undergo major change. Developments in the Argos network, such as the Argos Extra outlets, have initiated variations to the original logo, so that there are now several mainstream versions - all bound by specific printing instructions.

The History Behind the Logo In 1988, Argos unveiled a new eye-catching in-store design as part of a multi-million pound refurbishment and new store opening programme. As well as bringing merchandise onto open display in redesigned stores, the new look network featured a scarlet, silver and black colour scheme. In 1989, newly designed display graphics were introduced into the entire network. The original logo

By August 1999 another change was taking place. The ‘Brighter Shopping’ message meant the new Argos catalogue, advertising campaign and store refurbishments promoted a fresh, vibrant and confident image for a more modern Argos. The current logo

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abcd ARGOS STORES AND THEIR LOCATIONS…. With 95% of the British population living within ten miles of an Argos store, it is now easier than ever to get to a store. The numbers of stores are rising rapidly to offer that little extra convenience for customers, with stores being located on seven out of the top ten largest retail parks in the country. Currently Argos stores cover an area of over 7.5 million square feet. As part of the business planning process, a list is put together of locations where it is believed an Argos store would be successful. A successful Argos location is based on various factors including: • whether the demographic profile and social makeup of that location would find the Argos offer attractive • if the location is already, or will be, an attractive shopping destination • most importantly, if the catchment population of a location will be sufficient to provide the volume of trade which will provide the required level of sales to make the store profitable. Every location is assessed on its individual merits. Any factor which may influence a customer’s decision to shop there is taken into consideration – the availability of car parking or the perceived ease of travelling by car or public transport are factors considered, as these will influence whether someone considers a shopping destination attractive to visit. A multiple regression model is used to give a prediction of expected sales at a location. The inputs to this model are based on variables that have historically driven sales. As all locations are different in terms of these variables, it is the combination of these which provides a sales forecast and on which the company makes a financial judgement as to whether to open a store there. Theoretically there is no minimum population, as the decision to open a store is made on the profitability of the potential store (sales forecast versus costs) rather than a catchment population. Therefore, a small town with a good retail offer and a wide catchment area could perform as well as a large town with a poorer retail offer and a catchment population which is more limited relative to its size.

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abcd OFFERING CONVENIENCE…. Check & Reserve Before leaving the comforts of their home, Argos customers are able to save time and check that the items they wish to purchase are in stock, reserve the items, as well as check the store opening hours. Customers are able to do this by simply phoning the Check & Reserve hotline on 0870 600 1010, quoting their local Argos store number (found at the back of the catalogue), and following the simple instructions given by the automated service. Items can also be reserved for 48 hours at all local Argos stores via the internet at argos.co.uk. The items are paid for when collected from the store, giving customers an alternative option to paying over the internet. Argos likes to keep up with all the latest technological trends and is always striving to ensure each customer can shop in the most convenient way for them. With this in mind, the Text & Take Home service was launched in December 2002, which was a fast and easy way to check the latest prices and stock availability as well as reserve items by sending a message from any mobile phone.

Stock Checker As part of improving customer service, Stock Checker terminals are now available at all browser counters in store. They are quick and easy to use. All the customer needs to do is simply key in the catalogue number of the item required and the stock checker will inform them whether the item is in stock and the quantity of that item is available.

Quick Pay Kiosks To improve efficiency and reduce queuing times, Argos has introduced Quick Pay kiosks at many stores. Customers can now purchase the items they want using a touch screen, pay by credit card, receive a print out of their receipt and proceed directly to the indicated collection point.

Argos Direct Delivery Service Argos offers free home delivery on over 700 lines that are too bulky to be kept in our stores. There are four regional distribution centres housing Argos Direct items. Products marked ‘free delivery’ in the catalogue are delivered direct from our distribution centres to the home, normally within 14 days. Argos aims to deliver small items within 48 hours. What’s more, home delivery is free on orders over £150. There is a Saturday delivery option available and even a delivery to work option for added convenience. Approximately 24% of sales are delivered to the home.

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abcd 16 Day Money Back Guarantee In the vast majority of cases, if an item is returned in its original and unused condition and with the wrapping and receipt to any Argos store within 16 days of purchase we will exchange it or offer a full refund. Some exclusions do apply, such as jewellery and SIM cards

Argos Gift Vouchers Customers can purchase Argos vouchers if they are stuck for gift ideas. Available in denominations of £1, £5, £10 and £20, Argos vouchers make the ideal gift.

Argos Premier Points In 1991 Argos pioneered Premier Points – the UK’s FIRST fully electronic points collection programme aimed at building customer loyalty. The points can be collected every time a customer uses their Argos Card. More recently, on September 16 2002 Argos became part of what is the biggest ever UK points based loyalty scheme – Nectar – as its merchandise partner.

Argos Services Argos has developed a wide range of services for its customers such as pet, product, car and home Insurance; travel services; Argos Card; Argos Loans, Argos Business Solutions and the Argos Gift List. The most popular of these services are the Argos Card and the Argos Wedding List service. The Argos Card offers a wide range of credit deals, Premier Points to collect and exclusive money saving offers. Over 30,000 happy couples use the Wedding List Service on average per year. This service provides the flexibility to allow the customer to set up and manage their gift list online. This service can also be used for birthdays, christenings, and new baby gifts.

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abcd ARGOS VISION…. Competitive Position/Products/Target Customers Argos is fast growing and successful, admired for profitability with a top three market share in all the significant markets. To achieve this it has to ensure that: • It uses innovation and technology to continually push the boundaries of catalogue retailing • It has a broad appeal, attracting customers of all ages and income ranges by providing a wide range of reliable and affordable products and services to suit the customer’s everyday needs • By staying close to the customers, the market and competitors, the opportunity to quickly exploit new products, services and business opportunities is readily available

How Our Customers View Us Argos prides itself on offering customers choice, value and convenience through a wide product range and a network of stores. Its prime focus is on its customers and ensuring that all customers have a positive shopping experience every time they come into contact with the company. This is proved by research carried out by the marketing department who found: • 84% agreed that Argos prices are really good • 82% agreed that Argos is trustworthy • 92% agreed Argos stocks a wide rage of affordable products • 88% find Argos a convenient way to shop

Corporate Responsibility Argos believes that there is a responsibility to think beyond the financial measures for managing and judging success. Consideration of the impact on society is of great importance especially the social, environmental and ethical impacts of business behaviour. • Good deal to the consumer: Argos has over 20 million customers, so meeting consumer needs has a major social impact, as well as being critical to the success of the business • Reasonable retailing: Argos ensures that all the products on offer are safe and of appropriate quality. Steps are also taken to ensure that our products are sourced responsibly, that conditions in the supply chain meet the standards set by the business and that advertising and marketing of our products is carried out ethically • People and the community: Argos feels that there is a need to be a fair and dependable employer by providing an excellent place to work; maximising the feeling of pride for working for the company; and engaging and supporting, wherever possible, the many diverse communities from which we recruit our people • Environmental impacts: The nature and scale of the business means that there is a significant impact on the environment - from the miles driven by vehicle fleets to the amount of packaging associated with the products that are sold. Argos must continually help to minimise the impact of the business on the environment

How Our Suppliers View Us Argos has long term relationships with key chosen partners based on mutual respect and benefit. Suppliers understand the Argos business vision and value customers in the same way. There is a positive interaction with all suppliers to encourage continuing relationships and to develop regular and innovative projects.

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abcd SUPPLY CHAIN…. The main characteristic of a lean and efficient supply chain is having products available to customers without holding high levels of stock. The forecasting, planning and replenishment processes drive our supply chain. In early 2001 a fundamental review of the supply chain was carried out. It concluded that the current supply chain would constrain the future growth of the business unless substantial change was made. This meant the development of new capabilities as well as delivering substantial efficiencies. The key areas that were identified as needing specific focus were: • Improve our serviceability and customer offering • Ensure we remain competitive • Fulfil our growth ambitions • Manage our cost base more effectively Given that we have to hold stock, the effectiveness of our supply chain is determined by how well we manage the processes of forecasting, planning and replenishment. In addition, the quality of these processes is determined by the accuracy and timeliness of the information used - the adage of ‘rubbish-in’ ‘rubbish-out’ applies. For example, if the accuracy of our stock information is poor we could underestimate the replenishment needs of our stores and hence affect the availability of products to customers. Forecasting drives our long term planning to ensure, for example, that we have appropriate infrastructure investment plans in place to support our growth in sales. Forecasting also drives our operational plans used to determine our sales and margin targets, budgets and promotional activity plans. All critical to ensure that we have the right resources in place to meet anticipated demand. Finally, forecasting also drives the replenishment process which drives the movement of stock across our supply chain which ultimately ensures that stock is available when customers place orders.

Direct Importing Direct Import (or DI for short) is a significant part of the Argos business and is planned to continue to grow as an effective way of sourcing products. Over the last six catalogues, the number of DI products has doubled. A small dedicated team based at the head office control a wide range of products from the Far East and Asia. They rely heavily on the shipping agent Kuehne-Nagel to ship and move the containers through as quickly and efficiently as possible to the Direct Import distribution centres, Barton and Coalville. The process is as follows: • Beginning with product management, each line is given a landed cost price (a cost price which includes manufacturing one item and shipping that item to the UK, including labour) which is passed on to the buying team who will then decide on cost benefits for that line to be selected for the catalogue • Once the selection has been made, the information is then passed on to the relevant stock controller who will place orders with the suppliers and follow those orders through from ‘going to port to be shipped to the UK’ to ensuring that the containers are emptied and logged at the distribution centres ready to be sent to stores • DI stock controllers do not move the stock to stores as this is the job of internal stock control, who have exact data of the capacity of each store and how much stock any store can hold at any one time • DI also pays the suppliers for the goods that they produced through two methods: telegraphic transfer or letter of credit. The method of payment is discussed with the buyer during the selection process

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abcd MARKETING…. •

Argos won Retail Brand of the Year 2003 in the Marketing Week Effectiveness awards

Marketing Aims As a retailer, marketing is designed to promote Argos as the first place to visit for a wide range of affordable products. This is usually based around the different seasons, and products that are particularly important for that time of year. A whole range of marketing activity is then co-ordinated to convey the same message to potential customers.

Catalogue The Argos catalogue is the centre of all marketing efforts, with 35 million copies published each year.

Advertising Argos invests heavily in marketing and advertising every year with a total spend of £26million, using a mixture of television, radio, newspapers, magazines and posters, depending on which is the most cost-effective way of communicating the required message. Campaigns are usually national, but there also small local campaigns to support individual store openings.

Promotional Leaflets As a catalogue based retailer, special offers or new products are usually promoted via supplementary leaflets. These are also used to promote key seasonal products throughout the year, and to compete with other retailers at “Sale” time. Advertising, point-of-sale and the internet site are all used to let shoppers know what is happening at Argos.

Design and In-store Signage The look of the catalogue and stores influences how customers feel about Argos, so it is an important marketing tool. The in-store signage is also an important way of telling our customers about special offers, new services or new products.

Market Research Retailing is a very competitive business, so there is a need to ensure that ALL customers are happy with the products and services that are on offer, and to know where and how improvements can be made.

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abcd ZAK & PAM‌. •

Argos won the Retail Week Marketing Campaign of the Year 2003 for the Zak & Pam advertising campaign

Richard E Grant and Julia Sawalha continue to star in Argos' brand advertising campaign. The campaign marked a new direction for Argos when it launched in 2002 and challenges misconceptions about the brand. The campaign, created by Euro RSCG, features two characters, Zak, a rock star, played by Richard E Grant and his long suffering but incredibly efficient PA, Pam, played by Julia Sawalha. The adverts focus on the series of demands made by the pretentious rock star and Pam's success in finding the perfect solutions at Argos. They showcase top brands available at Argos and the accessibility of products via its range of services and multiple routes to purchase. Jenny Parry, Advertising & Consumer PR Manager says, "Argos is one of Britain's best kept secrets and the advertising engages a whole new audience with the brand. Argos is ahead of its time in championing accessibility via multiple routes to purchase and the adverts communicate the core benefits of convenience, range and value. Richard and Julia are the perfect stars for the campaign and we are delighted with the results�. The advertising has changed purchasing behaviour, increase positive perceptions of Argos and provided Argos with a competitive edge.

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abcd CUSTOMER SERVICES‌.

At Argos we strive to be accessible to all customers by whatever method they prefer i.e. via our stores, by telephone, by email and via the Internet. Any complaints are treated individually and handled by the store manager or by the customer services department. Argos provides an intensive customer service with phone calls being taken at a site in Widnes and letters and emails being handled by a site at Acton Gate. Acton Gate is also the customer service base for the Argos Direct home delivery service. Although Argos does not have a customer services charter as such, the main aim for any of the customer service departments is to answer customer calls quickly, fully and professionally. Customer service advisers are focused on helping the customer make an informed choice about their purchases from Argos. They listen and record the nature of each call i.e. request for stock, a product fault or an issue with store service. This gives the company valuable insight into its customers’ needs. The calls are fed through an agent call distribution system from a main switchboard; this system shows the calls waiting and each agent’s workload. Customer loyalty is essential to provide good customer service. There are regular customer feedback sessions where customers are invited to attend open evenings to discuss methods of improving services.

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abcd ARGOS AND THE MEDIA…. There are two departments that deal with media related issues - media relations and consumer PR.

Media Relations The media relations team is based at Argos’ head office Avebury, Milton Keynes and is responsible for all corporate PR for the Argos Retail Group. The department sits within the corporate affairs department which is responsible for ensuring that Argos protects and promotes its image within the media, gains benefit through addressing social, environmental and ethical issues and supports the community through charitable donations and its charity partner. Media Relations deals with: •

All retail correspondents and their enquiries

All trade press enquiries

All customer complaints that have been escalated to the press

All local or regional opportunities where there is a business story

All issues around corporate responsibility and charitable events

All third party releases

Consumer PR The Consumer PR team is also based at Avebury, but sits within the marketing department. The Consumer Press Office deals with: • Product placement and the creation of news stories about Argos products and services • Consumer journalists requiring images from the catalogue or wishing to borrow any Argos products to appear in magazines, newspapers or in TV programmes • Advertising enquiries or issues • All consumer press enquiries unless related to a complaint or business issue

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abcd INFORMATION TECHNOLOGY & E COMMERCE…. Since Argos was created it has been noted for its innovative use of technology. Computer systems have had a huge impact on the way Argos functions as a retailer. New technology has enabled Argos to monitor stock levels in much greater detail, helping to spot trends and avoid ‘out of stock’ situations. New technology has also affected communication with other areas of the business, with the use of e-mail and intranet increasing the speed and volume of two way communication.

www.argos.co.uk The growth of the internet has enabled Argos to offer new and more convenient services to customers through the award winning web site, making Argos a leading player in the e-commerce sector. The Argos web site was first launched in 1995 and has continued to grow to help meet the needs of customers. The products and promotions featured on the site mirror those in Argos stores. Even the colours and design of the site represents the ‘Brighter Shopping’ message. Argos is forever striving to provide the best possible service for its customers and is very proud of the award winning site. The site is continually reviewed via customer research, and improvements are implemented based on recommendations from these reviews.

The Features There are numerous services offered on the site to help make shopping on line as convenient as possible. These include the ability to: •

Browse through the catalogue

Search for a particular item

Make a purchase and have it delivered to your home

Reserve items to be collected at the customer’s local store

If a customer wishes to register with us they can receive an Argos newsletter containing all the latest deals and promotions.

Logistics The internet sales channel uses the Argos Direct home shopping infrastructure and therefore does not have any warehouses specifically dedicated to the internet channel. The Argos Home Delivery warehouses are based in Acton Gate (near Stafford), Welwyn Garden City, Marsh Leys (near Bedford) & Trafford Park (Manchester). These distribution centres fulfil all home delivery orders including those placed through the call centre, via e-commerce channels and via an Argos store.

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abcd Other Argos Internet Sites Argos has launched additional internet services offering more convenience and value to customers. These Include: www.argosmobile.co.uk, www.argos-b2b.co.uk (Argos Business Solutions), www.argoscareers.com and many more based on other Argos Services.

Systems and Security Argos works with partner companies on different aspects of systems and security, but has overall control of the web site. For example, the web site is based on the IBM Websphere package and IBM assisted in its development. Many other companies have also assisted in progressing and developing the site over the years. For security reasons, only a limited amount of information is kept on the website for a limited period of time and sensitive information is encrypted in line with our security policy.

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abcd ARGOS EMPLOYEES & HUMAN RESOURCES…. Argos employs circa 24,000 people. Approximately 1,500 are employed at the head office based in Milton Keynes and some 18,000 in over 590 stores. The remaining staff work in the distribution and home delivery operations.

Argos Values There are five values and beliefs that drive the distinctive behavior of people in Argos: • • • • •

We are customer focused We excel through team work We have a competitive will to win We take ownership and make things happen fast We respect and support each other

The Argos Structure A basic overview of the Argos structure looks like this:

Managing Director

Retail Operations Director

Director of HR

Finance Director

Supply Chain Director

Operations Director Argos Direct

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Commercial Director X2

Director of IS

Marketing Director


abcd Human Resource Divisions There are various areas that make up the Argos human resources department; all playing an integral part in ensuring and maintaining excellent working practices. • Avebury HR This human resources team look after 1,500 head office based employees at Milton Keynes and 300 staff in the field. There is an HR director, HR advisers and their respective assistants, who all have specific responsibilities for designated departments. They provide a comprehensive human resources service which includes advice and guidance on such areas as resourcing, employee development, employee relations and interpretation of policies. They aid the implementation of new policies and processes in close liaison with line managers, supporting the business in new structures and initiatives, enabling and facilitating better employment practices generally. • Distribution HR A dedicated team provide comprehensive human resource management support to distribution operations. Organised through a regional structure, with each regional distribution centre and the direct import centre having a dedicated advisor providing day to day support, the team cover a wide remit which includes the promotion of effective employee relations in the unionised environment. • Retail HR There are approximately 18,000 full time employees (FTE) in the company’s 590 plus stores, although this number usually doubles, to 36,000, in the peak Christmas trading periods. Field based staff with regional and area responsibilities are assisted by the retail HR team at the Milton Keynes head office. They fulfill a comprehensive human resource management role for the company’s retail operations. • HR Direct Store management are assisted on their HR and legislative enquiries by HR Direct, an in-house human resources helpline. • Training, Development & Learning Solutions The learning & development offer has been established by identifying the key learning needs across the business and developing appropriate learning solutions. The learning solutions team is responsible for identifying, designing and delivering training packages on new systems for stores as well as being involved in the general training and development of all the company’s employees. • Organisation Development This team is responsible for providing training and development solutions to directors and senior managers at Argos. They run a large selection of personal development courses, one to one management coaching and executive level succession planning. All people development processes are designed here. • Group Policy & Reward This department is responsible for payroll services, pensions, policy development, company cars, compensation and benefits such as BUPA and share options. They manage systems development which, in conjunction with the information systems team, maintains the integrated personnel and payroll systems.

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abcd • Health & Safety The health and safety department ensures that the business fulfils both its moral and legal obligations towards health and safety. It is responsible for ensuring that safety issues are considered in all parts of the business where operations may affect the safety and welfare of employees, customers or visitors. New business and legislative requirements are analysed and appropriate policies and procedures adapted to ensure the required standards are met. Complaints and queries, both external and internal, are dealt with here and the appropriate advice is given.

Equal Opportunity Policy In order to provide equal employment and advancement opportunities to all individuals, employment decisions are based on merit, qualifications and abilities. The company does not discriminate in employment opportunities or practices on the basis of any characteristic protected by law or governed by a code of practice. The company expects all employees, whatever their grade or authority, to abide by and adhere to this general principle. Argos always aims to overcome barriers to equality of opportunity in the workplace. To support this aim, the company's flexible working policy recognises and facilitates a number of alternative working arrangements, where this is practicable and in the interests of both parties. The overall responsibility for these policies lies with the human resources department. All staff are expected to comply with the policy at all times and to act in accordance with its objectives so as to remove any barriers to equal opportunities. The employer will view any breach of this policy or any other form of discriminatory action seriously and any employee who breaches the principles of equal opportunities contained within this policy will be liable to disciplinary action up to and including dismissal.

Internal Communications The internal communications team ensure that information flows efficiently and effectively around the company. A number of tools and methods are used to achieve this: • Argos Post, the monthly employee magazine • The intranet – providing instant access to company news • Promoting the Argos ‘tone of voice’ • Our ‘Team Talk’ cascade process for communicating major business objectives and strategies • Managing internal events and conferences • Supporting the values and company culture • Using notice-boards to keep employees up to date on news and benefits

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abcd THE FUTURE…. Argos is one of the country’s most popular retailers and we are determined to stay ahead of the competition by constantly evaluating our market and the way we do business to ensure that we are always delivering the best choice, value and convenience to our customers. Our aim is to be the most successful general merchandise retailer in the UK and we will listen to our customers to ensure that we are delivering the products and services they need at a price they can afford. Even in today’s competitive and diverse retail market, the future of Argos looks very positive and we will always strive to stay ahead of our competition by giving our customers what they want. Thank you for your interest in the company. We hope that this information has been helpful and wish you the best of luck with your studies.

NB – Please note that this document has been designed to provide general information on the Argos business and we are unable to provide more detailed information on the company or its activities. However, further information on Argos and its parent company GUS plc can be found in our annual report and corporate responsibility report. These can be found on the following websites: www.argos.co.uk and www.gusplc.co.uk. You may also find additional information regarding recruitment on www.argoscareers.com.

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