Sainsbury’s has terminated discussions with Chinese e-commerce giant JD.com over a potential sale of Argos, ending a brief period of speculation about the future of the UK’s second-largest general merchandise retailer.

The supermarket group confirmed on Sunday that talks had collapsed after JD.com indicated it would only proceed on “a materially revised set of terms and commitments which are not in the best interests of Sainsbury’s shareholders, colleagues and broader stakeholders”.

The move comes just a day after Sainsbury’s publicly acknowledged the negotiations, which it said could have accelerated Argos’s transformation. Sainsbury’s acquired Argos in 2016 for more than £1 billion, but the business has faced challenges as consumer habits shift online and hundreds of standalone stores have closed. Argos now operates almost 200 standalone outlets and more than 1,100 collection points, mostly within Sainsbury’s stores.

JD.com, one of China’s largest retailers, declined to comment on the breakdown of talks. Sainsbury’s, meanwhile, reiterated its commitment to Argos, stating, “We are taking focused action to extend range, enhance digital capabilities and improve relevance to grow frequency and spend in Argos,” and confirmed that Argos had traded in line with expectations over the summer, helped by good weather.

The retailer maintained its forecast for retail underlying operating profit of around £1 billion for the 2025–2026 financial year and said it would continue to deliver on its ‘More Argos, more often’ strategy. Sainsbury’s latest accounts valued Argos at £344 million, a significant drop from the £1.1 billion paid for Home Retail Group in 2016. The company has also been streamlining its financial services operations, selling off its travel money business and other portfolios in recent months.

Some analysts have questioned the effectiveness of integrating Argos into Sainsbury’s stores, noting that the shift to online shopping has changed the retail landscape. Sainsbury’s, however, remains focused on strengthening Argos’s position and delivering value for customers and shareholders.

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