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The company opened its first Megastore in 1979, at the end of Oxford Street near Tottenham Court Road.

The chain grew throughout the 1980s and 1990s, including through its merger with the Our Price chain whilst under the ownership of WH Smith.

In July 2008, near to the first anniversary of the Zavvi Entertainment Group, it was announced that the entertainment retailer was to partner with the charity Youth Music who would be hosting in-store events, band nights, sponsorship busking and music quizzes to raise money for the organisation, along with installing collection boxes across its stores.

On 5 December 2008 The Daily Telegraph reported that Zavvi was seeking help from the Virgin Group to guarantee millions of pounds worth of its stock payments to Woolworths' Entertainment UK (EUK) as EUK had entered into administration.

A trust fund was formed on 27 November 2008 when EUK went into administration, which "safeguarded" the money used to purchase gift cards.As a result, this placed pressure on the company's working capital and when quarterly rents were due, approximately £13 million, on 25 December 2008, the directors were unable to meet their creditor liabilities.Simon Douglas, the founder of the entertainment retailer stated, "We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, have been too much for the business to cope with." The companies within Zavvi UK, which entered administration, were Zavvi Group Limited, Zavvi Retail Limited, Piccadilly Entertainment Stores Limited, VR Service Limited, Ablegrand Limited and Ablegrand 2 Limited.HMV purchased 19 Zavvi stores to be merged into the HMV chain.Former managing director Simon Douglas and business partner Les Whitfield purchased five of the stores to form Head Entertainment, Richard Branson started his first Virgin store on London's Oxford Street in 1971.

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It was the UK's largest independent entertainment retailer before being placed in administration on 24 December 2008.