Primark plans to introduce home delivery in the UK, marking a shift in strategy as the retailer faces increased competition and subdued sales.
Key facts
- •Primark has purchased a warehouse in Sheffield to facilitate its upcoming home delivery service in Britain.
- •The retailer previously avoided online sales until 2022, when it introduced a click-and-collect model.
- •ABF expects Primark's global like-for-like sales to fall by 3% in the fourth quarter.
- •Associated British Foods plans to spin off the Primark fashion chain from its food business next year.
- •John Lewis reported a half-year loss of £124m, citing increased operational costs and a difficult market.
Primark has announced plans to launch a home delivery service in Britain, four years after the retailer first entered the e-commerce market. To support this expansion, the company has acquired a warehouse in Sheffield. While a specific launch date has not been set, the move follows the company's 2022 introduction of a click-and-collect service and comes as parent company Associated British Foods (ABF) seeks to boost trade amid challenging retail conditions.
By the numbers
Financial Performance and Market Challenges
Associated British Foods expects Primark's UK sales to grow by approximately 1% in the fourth quarter. However, like-for-like sales are projected to remain flat in the UK and decline by 3% globally. The company noted that sales of autumn and winter clothing were delayed by unseasonably hot summer weather, though demand improved as temperatures cooled. Primark faces significant competition from brands like Shein and Boohoo, as well as platforms such as Vinted and TikTok Shop, leading the retailer to lower prices on hundreds of items in July.
Strategic Shift and Operational Hurdles
Analysts suggest that Primark’s move toward home delivery is a defensive measure to keep pace with evolving consumer expectations regarding convenience. Experts note that the retailer must navigate the high costs associated with returns, which are typically more frequent for online orders than in-store purchases. Additionally, ABF plans to separate Primark from its food business next year. The company maintains that there is an opportunity for profitable growth through home delivery, supported by a more competitive landscape among delivery providers.
Broader Retail Context
The retail sector in the UK continues to face pressure from rising labor and energy costs. John Lewis recently reported that its half-year losses increased to £124m, up from £88m the previous year. The department store cited a challenging trading environment and the costs of business operations as primary factors. While Waitrose sales grew by 4%, the company experienced a slight dip in profits due to price reductions and the operational costs of managing heatwaves.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by BBC Business.
