Sainsbury’s has confirmed that its talks with Chinese retailer JD.com over the potential sale of Argos have collapsed.

The supermarket giant revealed in a statement today it had “terminated discussions” with JD.com, despite only announcing over the weekend that it was in communication with the Chinese group.

Sainsbury’s, which bought Argos in 2016 for a deal worth £1.4bn, has been looking to offload the general merchandise retailer after previously suggesting the growth in its main supermarket business has been “weighed down” by falling Argos profits. Argos recorded falling sales in three out of four quarters in the 2024 financial year.

JD.com is one of China’s largest retailers and also has a portfolio spanning the technology, logistics and healthcare sectors. The Beijing-headquartered group had been in talks to buy another UK retailer in Currys last year, before walking away from a potential deal in March.

A statement from Sainsbury’s said: “JD.com has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments which are not in the best interests of Sainsbury's shareholders, colleagues and broader stakeholders. Accordingly, Sainsbury's confirms that it has now terminated discussions with JD.com.”

Sainsbury’s did report that Argos had traded “in line with expectations” over the summer, which it said was aided by good weather, with H1 sales and profitability stronger against a period last year when Q2 sales were boosted by clearance activity.

“We are taking focused action to extend range, enhance digital capabilities and improve relevance to grow frequency and spend in Argos whilst delivering further operating model efficiencies,” the supermarket added.

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