Trading update reveals retailer to dip its toe further into online selling
Primark is to offer 2,000 children’s products as it trials click-and-collect services in more than two dozen stores in the North West of England.
However, the retailer’s owner said it is not likely to “ever” extend its online growth to home delivery for customers.
The business said the new trial will run out of 25 shops and will give those who live nearer a smaller Primark access to a much wider range of items.
Parent company AB Foods said on Monday: “Our average-size stores are only able to stock a limited range and for these customers the number of options available to them will broadly double, increasing even more for customers of our small stores.
“This trial will enable us to provide more fashion, licence and lifestyle products to more customers and more often.”
The business said its new UK website, which launched in April, has proved popular. Traffic to the new site has risen around 60%, and almost 15% of customers are checking stock levels in stores.
George Weston, the billionaire boss of the consumer giant, told the PA news agency, however, that there are still no plans for Primark to launch into home deliveries.
“We have a very strong kids’ range which we can’t always showcase entirely in our stores, so click and collect means we can sell all these items from stores where they might not be on display,” he said.
“But I don’t think we will ever do home delivery.
“We can see an opportunity with click and collect that works well alongside the store model in a way that isn’t the same with delivery.”
The retailer is set to deliver the margin that bosses promised a year ago despite inflation rocking large parts of the economy.
AB Foods said that Primark “remains on track to deliver a full-year adjusted operating profit margin of some 10%.”
It is an improvement from 7.4% in the company’s last financial year - which ended last September.
In November bosses told shareholders to expect a 10% margin for the current financial year, as sales soared when stores reopened following lockdowns.
Sure enough, sales were up by 81% in the three months to the end of May, when compared with last year.
Even when looking further back, to the year before the pandemic, sales are still 4% higher than they had been.
Some of the company’s TV partnerships have proven successful, with Lilo & Stitch and Stranger Things branded clothes performing well.
It comes despite massive inflation, which Primark has previously said will force it to increase prices in the autumn.
In Monday’s trading update, AB Foods said nothing about costs, inflation or prices at Primark.
But it did reveal pressures at many of its food businesses. AB Foods owns AB Sugar, which employs around 40,000 people worldwide, tea company Twinings, and others. It also owns Neill’s Flour in Belfast.
Across the food categories, sales rose 10% to £2.3bn in the quarter.
Shares in AB Foods were 0.7% higher after early trading.
Primark is to open its tenth store in Northern Ireland later this year at Craigavon’s Rushmere Shopping Centre. Work is continuing to restore its historic Bank Buildings store in Belfast after a 2019 fire.