Primark has announced plans to introduce a home delivery service in Britain, four years after its initial entry into e-commerce. The retailer has acquired a fulfilment facility in Sheffield to facilitate shipping products directly to customers' homes.
Primark did not offer online sales until 2022, when it initiated a click-and-collect service that required shoppers to pick up their purchases in-store. The company indicated that there is an 'opportunity for profitable growth' through home deliveries, which could enhance sales following reported subdued performance attributed to recent hot weather.
Associated British Foods (ABF), the parent company of Primark, stated that the fashion chain will continue to expand its Click and Collect service and plans to offer home delivery in Great Britain after conducting a detailed review. However, the company did not specify a launch date for the new service.
ABF projects that Primark's UK sales will increase by approximately 1% in the fourth quarter of the year. However, like-for-like sales, a critical retail metric that excludes the effects of store openings and closures, are anticipated to decline by 3%. The company noted that sales of autumn and winter clothing began later than usual due to the summer heat, but trading improved as temperatures dropped towards the end of the quarter.
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, commented that the introduction of home delivery 'will likely help boost the top line.' However, he cautioned that managing an efficient and profitable delivery and returns service presents challenges, particularly given Primark's low price point.
ABF plans to separate Primark from its food business next year. The fast-fashion retailer faces competition from brands such as Shein and Boohoo, as well as platforms like TikTok Shop and Vinted. In July, Primark announced price reductions on hundreds of clothing items.
Retailers in the UK are currently facing increased costs for labor, energy, and materials. For instance, John Lewis reported that its half-year losses have more than doubled, with sales in its department store division falling by 2%, while sales at its Waitrose grocery chain rose by 4%.