Primark boss defends decision not to launch online despite 90% profit drop

Ecommerce

Primark’s boss has once again defended the company’s reluctance to launch online despite profits plunging 90 per cent over lockdown.

Primark’s parent company Associated British Foods (ABF) yesterday celebrated record sales in the week following the reopening of non-essential retail stores.

Despite last week’s sales spike, which often saw queues for Primark stores stretching the length of the high street, Primark reported losses topping £1.1 billion over the last six months as its stores remained shut during the UK’s longest lockdown to date.

In the face of staggering losses, ABF’s chief executive George Weston once again defended the fashion retailers decision to remain a pureplay physical retailer stating that last week’s footfall “gives us every indication that millions of other people want to get back on the high street”.

“It’s where we go for coffee, to meet friends, to see a movie, go shopping, touch and feel clothing,” he added.

READ MORE: Primark’s refusal to go online could mean “the start of the end” for the beloved brand

“I personally don’t want to live my life behind a screen. I think all of that is just a normal part of life, a permanent part of being human really.”

Primark has come under fire from investors before about it reluctance to launch online, arguing that it’s model simply couldn’t operate with the additional delivery costs associated with ecommerce.

Weston explained: “Our cost advantage comes from the fact that we are a bricks and mortar retailer which has neither the picking up costs, nor the distribution costs, of an online retailer.”

In January, as the UK’s third national lockdown began, director of discount online retailer offeroftheday.com Rick Harris warned that Primark’s loyal fanbase would not remain so forever, and months without being able to shop with Primark could force customers to turn elsewhere.

“If truth be told, the resistance to move online is no doubt in part due to there not being a large enough margin in their clothes to justify a high level of return,” he said.

“Customers will only remain loyal for so long though; could this be the start of the end for Primark?”

On the news of Primark’s successful reopening last week, Hargreaves Lansdown’s Susannah Streeter commented: “Primark has been lost in the retail jungle during the pandemic, left stranded by repeated Covid closures.

“Without an online crutch to lean on, it’s been a harsh environment during lockdowns with a £1.1 billion hit to revenues. Even when stores were open, social distancing meant like-for-like sales were 15 per cent lower.

“Primark’s powerful social media presence has been key to its success in drawing shoppers back in, with 8.7 million followers on Instagram alone. For now it seems, this leopard won’t be changing its spots when it comes to its online strategy, with no plans to open a digital store.”

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4 Comments. Leave new

  • Keeping it real
    April 21, 2021 9:48 am

    Stop pushing for Primark to go online. They bring people to the high street which saves jobs not just there staff jobs but cleaners, security, maintenance, car park attendants etc also all these so called experts have no Business acumen, otherwise they would understand Primark retail model stack high sell low. Primark keeps shopping centres, retail parks & high streets alive we have a lot to be thankful to them for

    Reply
  • Primark wouldn’t work online because it is a store of discovery and impulse, people always spend more then they expected even with the cheap prices. You can’t replicate that online people don’t discover clothes in the same way they go to sections that they want products from i.e. t-shirts and they can see the basket value so limit themselves in ways they don’t in-store.

    Reply
  • Dale Fletcher
    April 21, 2021 3:33 pm

    It’s clear some want Primark to go online which would mean increasing their prices and losing their USP among the big operators. Like Red Bull, Primark know their market and their business, they are not following blindly like sheep as so many are. Recent reports are showing business constantly increasing their sales platforms causing massive implications for stock management, technical complexities and costs. My money is on Primark.

    Reply
  • If going online will put up prices in shops to cover the costs of return stock . this maybe good for the other high street retails not for everyone likes Primark.

    Reply

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