Primark is set to launch its first home delivery service in Great Britain, a significant shift for the fast-fashion retailer as it seeks to counter declining sales. The company, which has traditionally avoided home delivery due to cost concerns, announced this development alongside its quarterly sales report.
The retailer, which already provides a click-and-collect option, has faced challenges in the continental market, reporting a sales drop of over 4%. However, it anticipates a slight increase in sales in the UK and Ireland.
Primark disclosed that it has acquired an automated fulfillment center in Sheffield, enabling it to offer home delivery services in the UK, excluding Northern Ireland. The company stated, “Primark’s digital maturity, including the success of click and collect, and online market developments, mean there is now the opportunity for profitable growth through the home delivery channel.”
Despite the positive outlook for home delivery, Primark’s sales for the quarter ending September 12 are expected to decrease by 3%. While sales in the UK and Ireland rose by 0.4%, continental Europe saw a decline of 4.3%.
George Weston, CEO of Associated British Foods (ABF), Primark’s parent company, acknowledged that trading conditions in Europe remain difficult. However, he noted that initial customer responses to Primark’s recent price cuts on autumn and winter products have been encouraging.
Market analysts have pointed out that Primark’s move to adopt online delivery is a necessary adaptation in a rapidly changing retail landscape. Dan Coatsworth, head of markets at AJ Bell, remarked that the retailer had “no choice but to adapt to the modern retail world.”
Shares in ABF fell nearly 10% following the announcement, marking a 14% decline for the year. Analysts at Jefferies have expressed concerns about Primark’s vulnerability as it enters the final quarter of the year, citing rising consumer health concerns and industry input cost challenges.
As Primark prepares for a demerger from ABF, expected to finalize in December 2027, the retailer is projected to be valued at approximately £9 billion, while the food business may be valued at £4 billion. George Weston will lead the food division post-demerger, while Eoin Tonge, a seasoned executive, will continue as CEO of Primark.
Founded in Dublin in 1969, Primark opened its first UK store in Derby in 1974 and currently employs over 80,000 people globally.