Primark to test first move into online shopping

Primark is to make its first push into online shopping with a “click and collect” trial for children’s clothes that could be the start of a broader move away from its store-only retail business.

The development is a significant shift for the discount clothing retailer, which has held back from moving sales online, even though its business was hit hard during the pandemic, when stores were closed in lockdown.

Primark will trial a click and collect service for children’s clothes later this year that will allow customers to order online and pick up the items from one of 25 shops in the north-west of England.

The expansion could mark the start of a significant push into ecommerce for Primark, which is one of the only large UK-based clothing retailers not to offer an online service.

George Weston, chief executive of Primark’s owner Associated British Foods, said there was a “significant business opportunity” to make children’s wear available through click and collect.

“We’ve got a very strong kidswear business but we’ve always been short of space,” Weston said. “We believe this will fix that space problem and give more shoppers more reasons to come to our stores, more often.”

However he said the retailer was unlikely to move into online delivery. “It’s very high cost, the return rate is horrible, and I think it’s environmentally questionable.”

He said the group would “think about where else we could incrementally build the [click and collect] offer across other ranges and other categories”.

He added: “We’ll see how it goes but we think the potential is there to expand our offer beyond kidswear.”

Analysts at Barclays said the trial was “a significant move, not just a toe in the water”, adding that it should “drive higher footfall” in shops. “If successful, a wider rollout is possible next year,” they added.

Clive Black, an analyst at Shore Capital, said the development was positive but noted that Primark stores have been more resilient than expected in retail so far this year.

Primark’s click and collect service will initially offer 2,000 options across products, from furnishing a nursery to clothing children. About 40 per cent of this will be exclusive to click and collect.

Primark, which has stores across the UK, Europe and America, reported revenues of £1.7bn for the three months to the end of May, marking an 81 per cent increase compared with the same period a year ago.

The company, which has its headquarters in London, said all Primark stores were open during this period, in contrast to last year when most were closed until mid-April.

It said the growth in sales was 4 per cent higher than the same period before Covid-19 hit. Sales improved “markedly” in the UK and Republic of Ireland, although performance only started to improve at the end of the last quarter in Europe as a result of Covid curbs remaining in place.

Primark said it “remains on track” to deliver a full-year adjusted operating profit margin of 10 per cent. ABF, which includes grocery and food divisions, said it was “trading in line with expectations” and the outlook was unchanged.

Leave a Reply

Your email address will not be published.