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.
“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.”