Adobe StockThe owner of Primark has announced plans to launch home delivery in Great Britain in a bid to bolster the retailer’s online offering.
Associated British Foods (ABF), which also runs large food, sugar and agriculture operations, said it had bought a new warehouse in Sheffield to support the plans.
The company did not specify when home delivery would start but said it would come “in the future” for England, Scotland and Wales.
The Sheffield warehouse, which is highly automated, has been acquired from the Debenhams Group in a £90m deal, and is not expected to have an impact on people’s jobs.
It comes after Primark has grown its “click and collect” offering for people to shop and make purchases online then collect in stores.
It recently unveiled price cuts on hundreds of fashion items, which the company said had led to positive sales momentum particularly for nightwear, leisure and fitness ranges.
ABF is preparing to separate Primark from its food business and list it on the FTSE 100 as a standalone entity by the end of 2027.
Dan Coatsworth, head of markets for AJ Bell, said Primark offering home delivery was the “biggest UK retail news of the year”.
“Having full online transactional capabilities is something the company has always shied away from,” he said.
“It has always argued that low price-point items are uneconomical to send, particularly if someone is only ordering a pair of socks or a T-shirt costing a pound or two.
“It stubbornly retained this view for longer than anyone expected, before easing back by launching a click and collect service.
“We’re now primed for the full home delivery experience.
“While physical stores remain relevant, online shopping is well established and Primark clearly had no choice but to adapt to the modern retail world.”
In a trading update to investors, ABF said Primark sales are expected to have dipped by 2.6% over the past financial year, which ends on Saturday, when compared like-for-like with the year before.
The decline has been driven by weaker sales in continental Europe, whereas sales in the UK are estimated to have edged up by 0.6% year-on-year.
Primark sales started the summer season strongly but were then impacted by the prolonged hot weather, which delayed the transition to buying autumn clothing ranges, according to the business.
Trading has improved in the more recent weeks that temperatures have cooled, it said.
ABF’s chief executive George Weston said: “Our priority focus areas, the UK and womenswear, continued to outperform our other markets and categories.
“Primark has made significant progress in building its digital capabilities and will continue this through both growing click & collect and by offering home delivery in Great Britain in the future.
“There is now an opportunity for incremental and profitable growth through this channel.”
ABF owns a roster of brands in the grocery sector like Kingsmill, Twinings, Jordans, Patak’s and, following a recent acquisition, Hovis.
It warned that adjusted operating profits for the division are expected to be slightly lower than previous expectations, for the full year, partly because of Twining sales being dampened by the heatwaves reducing demand for hot tea.
It also has a sugar business which has been impacted by higher gas costs linked to the Middle East conflict and the prolonged spell of hot and dry weather affecting the UK beet crop.
The company is expecting to report an adjusted operating loss for the full year for the division towards the “higher end” of its guidance range of £25m to £60m.
Shares in ABF were down by around 9% in early trading on Thursday.
Follow STV News on WhatsApp
Scan the QR code on your mobile device for all the latest news from around the country
