Primark has announced that it will be launching home delivery in the UK – representing a U-turn for the retailer, which has fiercely resisted offering online delivery due to its tight margins.
Primark has offered click-and-collect since 2022 but has preferred to bring customers in-store to collect their items, betting on the additional purchases this often brings with it. Hinting at the decision to launch an online delivery service, it launched a new app earlier this year.
Parent company Associated British Foods (ABF) confirmed the strategic shift alongside a £90 million acquisition of an automated fulfilment centre in Sheffield to support future e-commerce logistics.
“A lot has changed in online retail”
The retailer issues the following statement: “Today we’ve shared our decision to introduce home delivery in Great Britain in the future. A lot has changed in online retail in recent years – from how customers want to shop and their expectations on the proposition. At the same time, the progress we’ve made digitally, especially the success of Click & Collect, has given us confidence that the time is right.
“Our stores will always be at the heart of Primark, today’s news is about giving customers even more choice in how they shop with us, another exciting way we’re growing Primark.”
ABF, which also owns Kingsmill Bread and Twinings tea, is planning to split Primark from its core business to form two separately listed companies. Analysts expect Primark to be valued at around £9 billion and the food business £4 billion.
A challenging market
Primark’s U-turn comes as the retailer’s low-cost, high-volume model faces stiff competition from Shein, Temu and TikTok Shop, as well as second-hand fashion platforms such as Vinted. In July, it said it was lowering the prices on thousands of its items.
Industry experts view the move as risky but essential as online competition accelerates. Dan Coatsworth, head of markets at AJ Bell, told the BBC that Primark “had no choice but to adapt to the modern retail world”.
The company has not yet announced when its online service will be launched – but while the move is expected to boost topline sales growth, the challenge will be to run an efficient and profitable delivery service at the price point customers expect. All eyes will be on Primark’s strategy for achieving this.
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