Primark to trial click and collect as shop sales rebound

·Finance Reporter, Yahoo Finance UK
·2-min read
A shopper checks products inside a Primark store at Oxford Street, after its reopening amid the spread of the coronavirus disease (COVID-19) in London, Britain June 15, 2020. REUTERS/Hannah McKay
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. Photo: Hannah McKay/Reuters

Primark’s owner has said that the budget fashion retailer will test out a new click and collect service on children’s products in some UK stores.

Associated British Foods (ABF.L) said from the end of the year, the fast fashion retailer will offer 2,000 children's products, including clothes and accessories, to order online and collect in 25 stores in the north west of England.

About 40% of the items will be available exclusively to click and collect, which Primark says will be “particularly attractive” for its customers who do not regularly shop in its larger stores.

Primark launched a website in April but until now shoppers have only been able to browse online.

The business said the UK website has proved popular. Traffic has risen around 60%, and almost 15% of customers are checking stock levels in stores.

Read more: Primark to cut 400 jobs in UK stores

“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,” AB Foods said.

“This trial will enable us to provide more fashion, licence and lifestyle products to more customers and more often.”

AB Foods said that Primark “remains on track to deliver a full-year adjusted operating profit margin of some 10%”.

It is an improvement on the 7.4% seen in the company’s last financial year — which ended last September.

Primark sales increased 81% but are still 9% lower than pre-COVID levels, now three years ago.

Read more: Average UK house price hits £368,614 in fifth record this year

In Monday’s trading update, AB Foods said nothing about costs, inflation or prices at Primark. But it warned in April that some of its prices would go up amid soaring inflation.

The group revealed pressures at many of its food businesses. AB Foods owns AB Sugar, which employs around 40,000 people worldwide, tea company Twinings, and others. Across the food categories, sales rose 10% to £2.3bn ($2.8bn) in the quarter.

ABF shares rose 0.2% to £16.12 in morning trading on Monday.

Richard Hunter, head of markets at Interactive Investor, said: “Inevitably, the main focus of interest is the performance of Primark, which represents around 44% of overall sales, particularly given the travails which have recently been reported by other retailers in the sector. With the shackles of the pandemic now largely removed, the figures are very promising.

“Against admittedly easy comparatives when the last vestiges of lockdowns remained, sales in the quarter rose by 81%. Perhaps more importantly, sales versus pre-pandemic levels were also ahead by a more pedestrian 4%, but this nonetheless signifies progress.”

Watch: Primark plots price hikes as sales rise 59% in first half of financial year

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting