Primark tests its first foray into online shopping

Primark will make its first foray into online shopping with a “click and collect” trial for children’s clothing, which could be the start of a broader shift away from store-only retail.

The development is a major shift for the discount clothing retailer, which has been reluctant to move sales online even as its business took a hit during the pandemic when stores were closed.

Primark A click and collect service for children’s clothing, which will allow customers to order online and pick up from one of 25 stores in the north west of England, will be trialled later this year.

Expansion could mark start of major push e-commerce Primark is one of the only major clothing retailers in the UK not to offer an online service.

George Weston, chief executive of Associated British Foods, owner of Primark, said providing children’s clothing through click and collect was a “significant business opportunity”.

“We have a very strong children’s clothing business, but we’ve been running out of space,” Weston said. “We believe this will solve the space issue and give more shoppers more reasons to visit our stores more often.”

However, he said the retailer was unlikely to venture into online delivery. “It’s very expensive, the return rate is horrible, and I think it’s a problem for the environment.”

He said the group will “consider where else we can build up incrementally” [click and collect] Other ranges and other categories of products are available”.

“We’ll see how it goes, but we see the potential to expand our offerings beyond children’s clothing,” he added.

Analysts at Barclays said the trial was “a major move, not just wading through water”, adding that it should “increase foot traffic to stores”. “If successful, a wider rollout is possible next year,” they added.

Shore Capital analyst Clive Black 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 a selection of 2,000 products, from setting up a nursery to dressing children. About 40% of that will be dedicated to click and collect.

Primark, which has stores in the UK, Europe and the Americas, reported £1.7bn in revenue for the three months to the end of May, up 81% on the same period a year earlier.

The London-based company said all Primark stores were open during this period, compared with last year when most were closed until mid-April.

The company said sales growth was 4% higher than in the same period before the Covid-19 outbreak. Sales in the UK and Republic of Ireland improved “significantly”, although results in Europe only started to improve at the end of last quarter as Covid restrictions remained in place.

Primark said it was “still on track” to achieve a full-year adjusted operating margin of 10%. ABF, which includes the grocery and food unit, said its “transactions were in line with expectations” and its outlook was unchanged.

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